Question

An impairment loss on a long-lived asset (asset group) to be held and used is reported by a business enterprise in

A.Discontinued operations.
B.The equity section of the balance sheet as a direct reduction of retained earnings.
C.Other comprehensive income.
D.Income from continuing operations.

Answer 1

An impairment loss on a long-lived asset to be used in a business is reported in the income from continuing operations of the financial statements.

Step-by-step explanation:

An impairment loss on a long-lived asset or asset group to be held and used is reported by a business enterprise in the income from continuing operations. Impairment is recognized in the financial statements when the carrying amount of an asset exceeds its recoverable amount. This loss reflects a decline in the future economic benefits or service potential of the asset. It does not relate to discontinued operations, is not a direct reduction of retained earnings in the equity section of the balance sheet, nor is it reported in other comprehensive income.