Premium Essay

Rough Waters Ahead Case Study

In:

Submitted By PennyXu
Words 2420
Pages 10
February 18, 2016
Research File Memorandum

Prepared by: Certified Public Accountants

Client: Smooth Sailing
Subject: Fair Value Accounting – Asset Impairment

Background: Smooth Sailing is a privately-held cruise operator. The company operates a sole cruise ship that was purchased using non-recourse debt from a bank. Nonrecourse debt is secured by the collateral. In the event of default, the lender can only seize the collateral and no further action can be taken against smooth sailing. Smooth Sailing believes their ship is independent of all of their other asset groups. The ship generates its own cash flows.

In the current operating year, pirates have entered the area where the cruise ship operates. As a result of this incursion, the ship experienced thirty percent lower cash flows of $1.0 million in the current year. The company does not anticipate this will change in the near-term. This change may require the company to consider an impairment loss on the asset since the fair value (future cash flows) does not exceed the carrying cost of the boat.

The boat currently carrying value is $4.6 million while the initial estimate of the fair value is $3.0 million. The debt also carries a value of $4.0 million. This initial estimate leads me to believe that this asset needs to be tested for impairment. The future cash flows should be used from the probability table (Exhibit A) in order to determine the value of the asset.

Statement of research problem or question:

What does US GAAP say about:

1. How does management perform asset impairment testing?
2. What categories of assets and liabilities should be included in the test?
3. Should an asset impairment loss be recognized?

Plausible Alternatives:

Question 1
• Compare the fair value to the book value based on market prices
• Compare recoverable discounted future cash flows to book value

Similar Documents

Free Essay

Informarion

...memory, impersonation and wishes when the spectator is confronting any sort of practices in his surroundings that demonstrates the likelihood of taking in the showed conduct. Hence, any rough sort of conduct demonstrated can be obtained and learned through this standard. Consideration is an imperative component for observational taking in the individual ought to offer regard for any sort of model in the persona environment. At that point memory, once ought to remember the activity to impersonate the molecule activity and impersonation is one of the components as well. In conclusion, yearning is essential to inspire the once to impersonate the observational conduct. The inauspicious Bandura concentrates on Transmission of Aggression Through Imitation of Aggressive Models or Imitation of Film-Mediated Aggressive Models (Bandura,Ross, and Ross, 1961:1963), were set inside of a social learning idea and were planned to detect the procedures driving the ways that youngsters and adolescents learn by watching and impersonating the practices of others. In this connection, thusly, the studies utilized motivator films back-anticipated on a duplicated TV, and the conduct of the youngsters was exact and recorded in a den circumstance, then after the survey scene. despite the prearranged way of these studies, Bandura's exploration was vital to the verbal confrontation about the power of media hostility. Besides, the work of Berkowitz Effects of Film Violence on Inhibitions nearby after viciousness...

Words: 1169 - Pages: 5

Premium Essay

China and India Case Study

...economy in the past and recently with impressive economic growth performance, draw obvious comparison. Over the last more than sixty years the two neighboring countries having adopted sharply divergent political and economic systems also provide a point of reference in any study of comparative systems. In this short essay we shall first briefly describe their patterns of economic growth primarily in the last three decades and their implications for the massive poverty and inequality in the two countries, and then move on to discuss the nature of governance both in public and private spheres, which shape those patterns. In 1820 the two countries contributed about half of world income (measured in 1990 prices), in 1950 they contributed less than 10 per cent (the preceding century in the case of China and nearly two centuries in the case of India included rather unpleasant encounters with the international powers), and the very rough projection is that in 2025 the two countries will contribute about one-third of world income (China much more than India). In the 1870’s as well as the 1970’s per capita income in comparable prices was somewhat higher in India, but since then China has shot far ahead. Even accounting for some possible overstatement in the Chinese official rates of growth, per capita income has grown at least twice as fast in China than in India over the last three decades. In the sectoral pattern of growth China has excelled particularly in manufacture...

Words: 2097 - Pages: 9

Free Essay

Piaget's Task

...CHAPTER NINE Quantity, Logic, Time, Movement, and Velocity C H A P T E R 8 dealt with what might be called the first wave of Piaget's experimental assault on the development of intelligence in the postinfancy years. There was to be a second wave, of larger scale and longer duration. This second wave of research had a small beginning in the period 1935-1940 with a few scattered journal articles (e.g., Inhelder, 1936; Meyer, 1935; Szeminska, 1935; Piaget and Szeminska, 1939) and moved into high gear in 1941 with the publication of the first (Piaget, 1952b) of a long series of full-length books on various cognitive-developmental problems: number, quantity, logic, space, time, and so on. QUANTITY There are several studies which touch on one or another aspect of the child's grasp of quantity notions (Apostel, Morf, Mays, and Piaget, 1957; Fischer, 1955; Inhelder, 1936; Piaget, 1960a; Piaget and Szeminska, 1939; Szeminska, 1935). The earlier papers are primarily of historical interest, since their contents have for the most part been incorporated into the systematic book on the subject by Piaget and Inhelder, Le Developpement des quantites chez I'enfant (1941). This book is divided into four sections, each three chapters long. In addition, there is the customary chapter of summary and conclusions at the end of the book. The first section deals with what is probably the best-known segment of the quantity work: the so-called conservation of matter, weight, and volume of an object...

Words: 14444 - Pages: 58

Premium Essay

Hydraulic Fracturing

...BP Paper Rough Draft 11/23/2012 April 20, 2012 British Petroleums drilling vessel Deepwater Horizon suffered an explosion, and then began expelling enormous amounts of crude oil into the Gulf of Mexico. Although many different individuals and organizations attempted to help BP fix their spewing well, it wasn’t until July 15 that the vent was cut off. Through our research we have developed an analysis that examines the cause of the cause of the disaster, the event itself and its aftermath. We would also like to offer our recommendations on the subject. British Petroleum is an international oil company base in London and is one the nations leading oil and gas producer (History of oil spill). In spite of BP’s market share, as a company they have an unfortunate history of safety breeches including a 2005 explosion at oil refinery in Texas (Deep Water dDrilling). These accidents seem to be a cause of weak corporate safety culture and cost leadership (On average, fifty percent of management bonuses were awarded on the basis of cost cutting). The lack of proper safety practice and absence of oversight has ultimately resulted in infrastructure and architectural failure (Deep Water Drilling). As with any disaster, each party involves attempts to prove their innocence and are all too quick to point a finger at a party that must be guiltier than they and the Deepwater Horizon spill is no different. Although BP owned the oil, other companies had considerable interaction with Horizon;...

Words: 2238 - Pages: 9

Free Essay

Fashion

...National Water Resource and Hydropower Development Programme, entitled Water Vision 2025. The Water Vision 2025 projects are expected to generate 16,000 MW of hydroelectricity. Other goals are to prevent water shortages, limit drought and increase water storage for a growing population. Five massive hydropower projects have been announced by the President of Pakistan; these are to be completed by 2016, with a generation capacity of 9,500 MW. Two of the projects are ready for construction, while three are in the stages of feasibility studies and preparation of tender documents.This report analyzes in the detail, the effect of work stress on employees personal life Contents | Page No | Executive summary | 3 | History | 4 | Relationship between employees and management | 5 | How to improve the Employee & Employer Relationship | 5 | How to improve the Employee & Employer Relationship | 6 | How to use employee Relationship management | 8 | Employee benefit program | 10 | The changing employer-Employee Relationship | 11 | Analysis of Employee Questionnaire Response | 14 | Conclusion | 16 | Reference | 17 | Executive Summary WAPDA was established in February 1959 to unify the maintenance of infrastructure previously overseen by provincial agencies. In October 2007, thermal power management was split into the newly formed Pakistan Electric Power Company (PEPCO).WAPDA has formulated a comprehensive $25–33 billion National Water Resource...

Words: 2658 - Pages: 11

Premium Essay

Gems and Jewellery's

...the information is accurate to the best of IMaCSs’ and NSDC’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. IMaCS and NSDC neither recommend nor endorse any specific products or services that may have been mentioned in this report and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed in this report. Neither IMaCS nor NSDC shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this report. Human Resource and Skill Requirements in the Gems and Jewellery Industry Study on mapping of human resource skill gaps in   India till 2022  Human Resource and Skill Requirements in the Gems and Jewellery Industry Table of Contents 1.  Environment Scanning and Competitiveness of the Gems and Jewellery sector...

Words: 16187 - Pages: 65

Free Essay

Lost Innocents

...The Lost Innocents Richard Napper University of Phoenix When an individual makes the complicated decision of adding a four-legged member to their family it should be viewed as a lifelong commitment. The majority of people who decide to take in a new four legged family member usually have the best intentions at the time. However, life happens and things tend to change. The puppy who was once small and adorable is now full grown, becoming ignored, and is chewing for attention. The kitten who was once a cute little ball of fur is now not so little and clawing the furniture and using the potty in paces other than the litter box. Maybe there was a job loss in the family, or the individual has become homeless because of financial mishaps. With foreclosure on the rise these days due to a bad economy this is happening more often than not lately. One must plan for these types of issues that may arise in the near or distant future. There are a lot of individuals who believe that an animal shelter is the answer of all answers. The awful truth is they are mostly overcrowded and under staffed. More animals get euthanized inside the shelter due to lack of space than adopted by potential lifelong owners in the animal shelter. The animal shelter should not be used as a way to ease guilt on the former owners’ conscience. It should not be used as a dump site or a place to put your older animal like you would a senior citizen in a nursing home. Is animal abandonment ethically and morally wrong...

Words: 3866 - Pages: 16

Premium Essay

Fiscal Administration in Law Enforcement

...Research Paper Albert Amos Sr. Fiscal Administration in Law Enforcement LEA432 Prof. Zachary Steward May 4, 2014 One of the most expensive services that local governments provide is police service. As is the case in many local government agencies today, police departments are being asked to provide more services than ever before with less resources available to fund these new initiatives. As it becomes apparent that there is not enough money available to fund necessary programs, and the funding is not forthcoming, local governments have been forced to reexamine themselves to find new ways to provide the essential services that they are obligated to provide. In the age of budget cuts that we live in today, performance management is being used more and more to help organizations effectively meet their objectives in an economically responsible manner. 1.) The impact of a recession on a law enforcement agency’s ability to plan a budget Parlow, Matthew J., "The Great Recession and Its Implications for Community Policing" (2012). Faculty Publications. Paper 607. http://scholarship.law.marquette.edu/facpub/607 When the economy was flourishing, local governments were able to pay for services to any jurisdiction. The Great Recession has forced localities to think critically about whether they can sustain these practices given budget cuts. Sweeping reductions put law enforcement on pace for its first job decline in 25 years. The effects of the economic downturn on law...

Words: 2763 - Pages: 12

Premium Essay

Health Contract

...balancing all of the above mentioned aspects and always seeking to improve in all aspects of your daily life. Maintaining that balance and constantly improving is true health. Health Wheel Assessment Spiritual: 9 Intellectual: 8 Social: 10 Physical: 6 Environmental: 8 Emotional: 7 Although I feel that I am doing all right in the majority of the areas mentioned on the wellness wheel, there is always a need for constant improvement and I feel that staying stagnant in any area actually means getting worse in that area. Trying to keep a realistic goal in mind for improving my well-being, I have decided to focus on two areas of my life throughout this course that should allow me to improve my overall well-being. I work full-time, study full-time, have a family and participate regularly in social and church functions. My energy levels are low enough because of how active I am; I need food that is going to energize me or at least help me to have the stamina I need. My plans include having, yes, a more balanced diet but I want to actively track what I eat and ensure that it is truly good for me. I will continue my exercise and ensure that I get the sleep I need to improve my overall physical well-being to at least an 8 but hopefully a 9. My second area of improvement is focused around my emotional well-being. I work in a fairly stressful...

Words: 1854 - Pages: 8

Free Essay

American and Vietnamese Communication

...Go to All About Homonyms | A | | a | very short little insignificant English word | | eh | an interrogative utterance | | | | | acts | things done | | ax | chopping tool | | | | | ad | short for advertisement | | add | short for addition | | | | | adds | performs additions | | ads | more than one advertisement | | adze | axe-like tool | | | | | ade | fruit beverage | | aid | to assist | | aide | an assistant | | | | | aerie | eagle's nest | | airy | breezy | | | | | aero | of aircraft | | arrow | slender, pointed shaft | | | | | affect | to change | | effect | result | | | | | ail | sick | | ale | beer | | | | | | | | air | stuff we breathe | | are | 1/100th of a hectare | | e'er | contraction of "ever" | | ere | eventually | | err | to make a mistake | | heir | one who will inherit | | | | | | aisle | walkway | | I'll | contraction of "I will" | | isle | island | | | | | all | everything | | awl | pointed scriber | | | | | allowed | permitted | | aloud | spoken | | | | | altar | raised center of worship | | alter | to change | | | | | an | a single instance | | Ann | a woman's name | | | | | ant | insect | | aunt | parent's sister | | | | | ante | preliminary bet | | auntie | sister...

Words: 6383 - Pages: 26

Premium Essay

Leadership on Church

...leadership styles are sometimes more effective in different situations. “Leadership is a relationship- a relationship in which one person seeks to influence the thoughts, behaviors, beliefs or values of another person.” That is, from the experience one person who is interested in passing it to another person, to change his entire being and give him another orientation in formal way or informal. Paul Hersey and Kenneth Blanchard define leadership as “any attempt to influence the behavior of an individual or group” DEFINITION OF TERMS JETHRO: - Jethro, also called Reuel (Exod. 2:16-18; Num. 10:29), was “the priest of Midian” (Exod. 2:16). We first encounter Jethro when Moses rescued his seven daughters from the rough treatment of other shepherds at a well and helped them water their flocks. Moses later became son-in-law to Jethro. MOSES: - Deliverer of Israel from Egypt, law-giver, servant of God; “draw out” of the Nile, raised in Pharaoh’s house (Exodus 2:1-10) LEADERSHIP: - “The state or position of being a leader” leadership in this context involves the task of a leader in leading, guiding, directing and influencing those who work with him or her. He or she exercises...

Words: 2946 - Pages: 12

Premium Essay

Mr Dajid

...4. Literature Review 15 4.1 Digital Music Market and Retailer 15 4.2 Social media 18 4.3 Social Media Tool and Music Retailer 21 5. Research Gap and Significance 25 6. Research Aims 25 7. Research Methodology 27 7.1 Research Source: Secondary data 27 7.2 Research Method: Case study 28 7.3 Research Steps 29 8. Research Analysis and Findings 31 8.1 Research Analysis 31 8.1.1 Audience Insight 32 8.1.2 Direct, Simple and Convenient Design 37 8.1.3 Insider Strengthening 39 8.2 Research Findings 41 8.3 Research Recommendation 42 9. Research Limitation 43 10. Conclusion 44 References 46 Abstract HMV is a British entertainment retailer, which is selling music including physical music and digital music. However, HMV does not runs good social media. In this dissertation, I will explain music industry context and HMV’s social media issue, followed by reviewing literatures about digital market, social media and music retailers. Furthermore, I design a research with secondary data research and case study method, and investigate how to deal with HMV’s social media issue through exploring what and how do other successful cases do for this challenge especially on social media. Key words: Digital market, Music, Retailer, Social media, Introduction HMV, which is a short name of “HIS MASTER’S VOICE”, is a British entertainment retailer that primarily sells CDs, DVDs, video games, and partly sells computer software...

Words: 9773 - Pages: 40

Premium Essay

Deliotte Bricks and Mortar

...Relations > Deloitte Foundation Global site selector Go Search Search Top searches Top searchesBookmark Email Print this page Increase font Alliances Catalyst for Innovation Community Involvement Corporate Responsibility Deloitte’s sponsorship of the U.S. Olympic Committee Inclusion Deloitte University Ethics & Independence Deloitte Life Growth Through Acquisition History Investor Confidence Leadership University Relations Deloitte Foundation Faculty Resources Faculty and Ph.D. Support Life, Inc. Student Events The Trueblood Case Studies DOWNLOAD For a complete index of Cases and Addendum summary please click the download button above. The Trueblood Series cases and solutions are available in Adobe PDF format below. Solutions are password protected for faculty use only. Access to solutions by other unauthorized individuals is strictly prohibited. To find out how to obtain access to the case solutions, please contact us via e-mail or mail a request on your school letterhead to: Deloitte Foundation Ten Westport Road Wilton, CT 06897 Due to the...

Words: 2280 - Pages: 10

Premium Essay

Driving

...Class D & E Driver’s Guide LOUISIANA OFFICE OF MOTOR VEHICLES DPSMV2052 (R042013) Message from the Commissioner “Welcome to driving in Louisiana.” I am pleased to present the Louisiana Driver’s Guide to our new and current drivers. This guide is designed to provide you with the rules of the road, knowledge to assist you in making better driving decisions, and valuable information on safety and sharing the road with others. It is incumbent upon you, the driver, to respect all traffic laws and other drivers as well. Driving is a vital part of life. It provides you with a means of attaining the necessities of daily living as well as providing you with the added convenience to move about at leisure. The driving experience, however, is a privilege and comes with great responsibilities. Please strive to become a safe and dependable driver to ensure that this privilege is not lost. Driving, the same as life, is a constant learning experience. The information contained in this guide, along with your experience and responsive actions while driving, will assist in protecting you, your family, and other drivers. This guide is not intended to be an official legal reference to the Louisiana traffic laws. It only highlights those laws, driving practices and procedures that you will use most often. It should be noted that the material in this guide is subject to change to comply with amended State and Federal legislations. Remember to buckle up. Safety belts save lives. Let’s work...

Words: 59152 - Pages: 237

Premium Essay

Tiffany and Co

.... Tiffany and CO. A case study presented by: Ben Turkia Emna For MGMT 6000: Marketing management Harvard summer term Synopsis Prince charming on his white horse, Cinderella and her glass shoes, princesses, fairy tales…. Are strong definers of pop culture and perception. Those symbols learned and adopted during a girl’s childhood translate into brands and product as that girl becomes a woman some brands have done a very good job capturing these concepts and translating them in a marketing proposition: the Vera Wang dress, The Louboutin shoes and of course the tiffany’s six prongs setting diamond ring are part of the myth they are part of every women’s dream wedding. Like everything born in New York tiffany has a strong mythic history founded in 1837 by Charles Tiffany, the brand became since its first day a destination for luxury and uniqueness, reinforced by its founder commitment to high end unique world renown pieces such as the tiffany’s yellow diamond – a 28 carat unique stone- or the French crown jewelry he acquired the brand gained very quickly a unique identity associated with the world’s best pieces of jewelry. The tiffany’s brand today: In 2012 tiffany launched a new product Rubeto to celebrate its 175th anniversary this new metal called rose gold is in the fact a composite made only from 31% of gold and a mix of other metals featuring essentially copper. Despite its very low concentration in gold the Rubeto collection retails for over 7000usd a piece. (FORBES) ...

Words: 2611 - Pages: 11