Case 1: Astro Incorporated 1. For the following investments, determine if Astro should record an other-than-temporary impairment as of December 31, 2014, and if so, for what amount: * Happy New Year & Co. – Astro should not recognize because it has no intention to sell and there is not a permanent decline. * Beary Beary – Astro should recognize because it has an intention to sell and recognizes an impairment loss of $7 per share ($95-$88). * Buy-A-Lot Company – Astro should not recognize because it has no intention to sell and credit rating upgraded from BBB to BBB+. * ASC 320-10-35-21: “An investment is impaired if the fair value of the investment is less than its cost.” * ASC 320-10-35-33: “When an entity has decided to sell an impaired available-for-sale security and the entity does not expect the fair value of the security to fully recover before the expected time of sale, the security shall be deemed other-than-temporarily impaired. * ASC 320-10-35-33F: “There are numerous factors to be considered when estimating whether a credit loss exists and the period over which the debt security is expected to recover.” 2. Assuming Astro has determined its investment in March Madness Incorporated stock is other-than-temporarily impaired, how much should be recorded as an impairment charge as of December 31, 2014? * $5,000 of CV – ($72/share * 50 shares) = $1,400 * ASC 320-10-35-33 other-than-temporary impairment is difference between CV and FV of stock. 3. Assume the same facts as in 2 above, but that Astro has not yet determined whether an impairment exists or the amount of any possible impairment. For March Madness Incorporated, would Astro still conclude that the investment is other-than-temporarily impaired, and would the impairment charge as of December 31, 2014, be different if the stock price at issuance of the