Answer:
The management assertion by the management is supportable.
Step-by-step explanation:
According to ASC 360-10-35-2 a long-lived asset / an asset group needs to be tested to know if it can be recovered or not whenever any events or any changes in circumstances points out that it's carrying amount may not be recoverable. An indicator of impairment include a new event or circumstance, which has the power to significantly control the carrying value of the long-lived asset or the asset group .
Examples of indicators of impairment discussed in ASC 360-10-35-21, include the following but are not limited to:
A significant decrease in the market price of a long-lived asset or asset group
The current-period working or cash flow loss combined with a past operating or cash flow/ losses or future expection that indicates continuing losses associated with the use of a long-lived asset or asset group
A current expectation that shows more likely than not, a long-lived asset or asset group will be sold or disposed off significantly before the end of its previously estimated useful life.
Based on the above discussion, although, the entity is under distressed market conditons and is going through downward profit situation, the management can predict that it can finance or manage itself. The past records of the entity also accumulated together indicates no negative cash inflows. In addition, there exists no condition of selling any asset or the Asset group. Therefore, decision by the managemnt is supportable.