The use of undiscounted, instead of discounted, cash flows for identifying asset impairment losses under U.S. GAAP
Question:
The use of undiscounted, instead of discounted, cash flows for identifying asset impairment losses under U.S. GAAP seems to lack a conceptual basis. Explain why discounted cash flows are preferred to undiscounted cash flows in this scenario.
What is Discounted Cash Flows? Discounted Cash Flows is a valuation technique used by investors and financial experts for the purpose of interpreting the performance of an underlying assets or investment. It uses a discount rate that is most... GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...
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An asset impairment loss that arises during a period results from a decline in fair value ...View the full answer
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Related Book For 
Financial Accounting An Introduction to Concepts, Methods and Uses
ISBN: 978-1133591023
14th edition
Authors: Roman L. Weil, Katherine Schipper, Jennifer Francis
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