(a) While studying a firm's income statement,you notice the line item: Amortization expense$\quad\quad\quad\$ 400,000$ Write a short report to a client of yours who is interested in providing a loan to this firm.In other words,what does the $400,000 amount mean,and perhaps more importantly,what does it not imply?
(b) Also,you come across the following line item: Impairment loss, property$\quad\quad\$ 600,000$ What does this amount represent,when is it recognized,what may have caused it,and how does it affect subsequent amortization,assuming that the property is not a total loss?

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The Answer of (a) While studying a firm's income statement,you notice the line item: Amortization expense$\quad\quad\quad\$ 400,000$ Write a short report to a client of yours who is interested in providing a loan to this firm.In other words,what does the $400,000 amount mean,and perhaps more importantly,what does it not imply?
(b) Also,you come across the following line item: Impairment loss, property$\quad\quad\$ 600,000$ What does this amount represent,when is it recognized,what may have caused it,and how does it affect subsequent amortization,assuming that the property is not a total loss?

(A) While Studying a Firm's Income Statement,you Notice the Line $400,000\quad\quad\quad\$ 400,000$400,000

(A) While Studying a Firm's Income Statement,you Notice the Line $\quad\quad\quad\$ 400,000$