A company buys a retail store on January 1, 2012 with a ten-year life and a cost of $800,000 and no residual value. Straight-line depreciation is used. The company expects to generate positive cash flows of $93,000 per year. On January 1, 2015, a new road is built which takes traffic away from the store sofor the remainder of its lifeit will only generate positive cash flows of $82,000 per year. An appraisal is made and the building has a fair value of $480,000. What recording, if any, is made on January 1, 2015?

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Answer rating: 100% (QA)

In this scenario the company needs to account for the change in the expected cash flows and the fair ... View the full answer