...TrueBlood Case – Rough Waters Ahead 1. How should Smooth Sailings’ management perform the recoverability test for the cruise ship as of December 31, 2010? In addressing this question, consider: The following are the required steps to identify, recognize and measure the impairment of a long-lived asset (group) to be held and used: Step 1: Indicators of impairment — FASB ASC 360-10-35-21 “A long-lived asset (asset group) shall be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable.” * In this case, there is a possibility of impairment because of an increased presence of pirates in the area in which Smooth Sailing cruises, the cruise ship’s operating performance has significantly declined, which has directly contributed to a decline in its overall fair value. Step 2: Test for recoverability “If indicators are present, perform a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the asset (group) in question to their carrying amounts “ * In this case, $2.3million < $4.0million Step 3: Measurement of an impairment “If the undiscounted cash flows used in the test for recoverability are less than the long-lived asset’s (group’s) carrying amount, determine the fair value of the long-lived asset (group) and recognize an impairment loss if the carrying amount of the long-lived asset (group) exceeds its fair value.” •...
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...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: ...
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...Case 12-9 Rough Waters Ahead - IFRS 1. Cruise Ship belongs to the assets that apply to IAS 36 Impairment rule IAS 36-2 states the Impairment of Assets rule shall be applied in accounting for the impairment of all assets, other than: a) Inventories b) Assets arising from construction contracts c) Deferred tax assets d) Assets arising from employee benefits e) Financial assets that are within the scope of IFRS 19 f) Investment property that is measured at fair value g) Biological assets related to agricultural activity that are measured at fair value less costs of disposal h) Deferred acquisition costs, and intangible assets, arising from an insurer’s contractual rights under insurance contracts within the scope of IFRS 4 i) Non-current assets( or disposal groups) classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations Smooth Sailing’s cruise ship does not fall into any exception of IAS 36, so IAS 36 should apply to impairment of cruise ship. Smooth sailing’s nonrecourse debt should not be included for the recoverability test according to this regulation. 2. Cruise Ship should be impaired based IAS 36-12 IAS 36 provides guidance on which indications entities should consider in determining impairing an asset and Smooth Sailing’s case meets the *indications listed in IAS. ...
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...In the "Rough Road Ahead: Do Not Exceed Posted Speed Limit" by Joe Kurmaskie, a cyclist decides to test his luck with trying a “‘shortcut’ that was to slice away hours of [his] ride to Yosemite National Park”, advice given to him by a group of old strangers. Eventually he begins to realize that his trust was misplaced as his water supply diminishes to nothingness and the landscape changes from hopeful straight roads to ghost-town scattered hills. The various tragic events in the setting, such as the rusted pump and washout juice factory, as well as his depletion of water, follows the downward spiral of both the cyclist’s sanity and trust. The water pump at the first stop on the Yosemite trip is a sign of hopefulness for the cyclist, that is, until he realizes that the pump is rusted. As he works “the handle of the rusted water pup with all [his] strength” the narrator slowly realizes how little help the “two hundred degrees…battery acid” water will be for him. The water pump, a sign of possible revival, shows the beginning of the cyclist’s sanity’s fall. His water supply continues to deplete as he moves on, where the “flat road [is] replaced by short, rolling hills”....
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...MY 1st Rollercoaster Click!,Click! As we walked into michigan's adventure we gave the workers our tickets and walked into the wet, colorful water park. I stared in awe at all the different rides and games around me. My mom, sister and I kept walking looking for a ride to go on. We continued walking while I was feeling a little queasy looking at all the different rides they had. I walked straight up to what looked like an old antique roller coaster made out of wood. I tipped my head up looking at the roller coaster which appeared to go on forever into the sky. “That one!” I said steadily. We got in the back of the line and I was a little nervous I was about to go on my first ever roller coaster. The coaster came back the where the line was at, and I was the next up.I saw the people waddling off very slowly. I sat in the two person wooden seat. I stared straight ahead at the wood rails with tiny metal bars underneath and a giant fake crack on the right wooden post. straight ahead of us.I sat in fear on the rough black plastic seat that reflected the sun right above me....
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...MY 1st Rollercoaster Click!,Click! As we walked into Michigan's Adventure we gave the workers our tickets and walked into the wet, colorful water park. I stared in awe at all the different rides and games around me. My mom, sister and I kept walking looking for a ride to go on. We continued walking while I was feeling a little queasy looking at all the different rides they had. I walked straight up to what looked like an old antique roller coaster made out of wood. I tipped my head up looking at the roller coaster which appeared to go on forever into the sky. “That one.” I said steadily. We got in the back of the line and I was a little nervous I was about to go on my first ever roller coaster. The coaster came back to where the line was at, and I was the next up.I saw the people waddling off very slowly. I sat in the two person wooden seat. I stared straight ahead at the wood rails with tiny metal bars underneath and a giant fake crack on the right wooden post. Straight ahead of us. I sat in fear on the rough black plastic seat that reflected the sun right above me....
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...MY 1st Rollercoaster Click!,Click! As we walked into Michigan's Adventure we gave the workers our tickets and walked into the wet, colorful water park. I stared in awe at all the different rides and games around me. My mom, sister and I kept walking looking for a ride to go on. We continued walking while I was feeling a little queasy looking at all the different rides they had. I walked straight up to what looked like an old antique roller coaster made out of wood. I tipped my head up looking at the roller coaster which appeared to go on forever into the sky. “That one.” I said steadily. We got in the back of the line and I was a little nervous I was about to go on my first ever roller coaster. The coaster came back to where the line was at, and I was the next up.I saw the people waddling off very slowly. I sat in the two person wooden seat. I stared straight ahead at the wood rails with tiny metal bars underneath and a giant fake crack on the right wooden post. Straight ahead of us. I sat in fear on the rough black plastic seat that reflected the sun right above me....
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...Nevada’s desert nearby Las vegas. Building the Hoover dam was the largest government project ever attempted. Hoover dam had to provide: fluid control, irrigation, drinking water and electricity. Without controlling the river Colorado into Hoover dam there would not be any possibility to build up cities like Las vegas. Hoover dam is one of the primary attractions for the visitors Las vegas from the whole world. More than one million tourists per year come here to see the spectacular piece of human work. The river Colorado is the same river, which carves the worldwide famous natural sight the Grand Canyon. The watercourse is 14 hundred miles long and it flows through seven states: Wyoiming, Nevada, Utah, Colorado, California, Arizona and New Mexico. The river ends into the Gulf of California. Robet Walsh from Bureau of Reclamation says, that the early settlers who were trying to build up their own economy were ruined in the spring, because of the flood, which had been caused by melting tons of snow in Rocky Mountains and in the summer when the farmers really need the water they could not get enough to irrigating. So they had to take the control over the devastating river and the first idea about dam was born. In the beginning of 20th century private company constructed a canal system to deliver water into Imperial Valley in Southern California and it was a major success The harvest was enormous and thousands of people moved into Imperial Valley with dreams but it soon changed...
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...Case 12-9: Rough Waters Ahead 1. How should Smooth Sailings’ management perform the recoverability test for the cruise ship as of December 31, 2010? a. What assets and liabilities should be included in the “asset group” as defined by ASC 360-10 for purpose of performing the recoverability test? i. FASB ASC paragraph 360-10-35-23 states that for measuring an impairment loss, long-lived assets should be group with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. ii. As a result, I’ve decided to include the cruise ship in the asset group, because it’s an asset that we’re performing the recoverability test for. I also decided to include net working capital of $0.1 million, because net working capital is often included in asset groups. However, I did not include the nonrecourse debt of $4.0 million because its cash flows are too debt on the asset itself. Furthermore, FASB ASC paragraph 360-10-35-27 states that long-term debt should be adjusted before testing the asset for recoverability. Total = $4.7 mm b. How should the multiple operating scenarios impact the recoverability test? iii. FASB ASC 360-10-35-30 states that when multiple courses of action are considered to recover the carrying amount of a long-lived asset (asset group), then the likelihood of each of these situations should be considered, and a probability-weighted approach should be useful. It is important...
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...Why the West Rules for Now Part Three Written by Ian Morris In this part, the author focuses more on the future and social development. It starts out by explaining that biology is not the answer to why the west rules for now, it is social development. The key to social development is that the west had the more favorable geography. This gave the west several generations ahead of the east, but the imbalance of progress was able to give the east more time to catch up with the west in terms of development. Because of the ability to farm, and because people are more of the same, westerners had an advantage. The point is that geography made it easier for westerners to advance in social development. After Morris explains a brief look in the past he then focuses on our time and the future we have ahead if trends continue to occur. And according to all the information we know now, the East will catch up to the West in about 2103. But, only if western society stays the same as it is. Morris chooses this estimate because of past trends. He uses an elaborate scoring system that gives a rough estimate to show the amount of change now as opposed to the past. And he concludes that change has occurred 4 times faster now than social development in the past. The world is changing very dramatically and he calls the 21st century of period of time called the singularity. The singularity is the theory that innovations are occurring so fast that it appears to be instant and that...
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... To make this dream come true, I know I have a great deal of work ahead of me. Create a goal to get through school and get a good job, saving up all the money I can, to pay for this place that I want to call my dream home. While making my way through high school I would always tell my parents how I wanted a beautiful home on a beach. They always told me to go get good grades and go to school to get a good job. Through high school I really struggled to get the grades that I knew would get me somewhere. When I realized that I could push myself to do better in school I took advantage of that opportunity. I went out and found tutors and got the help that I needed to raise my grades. As time went on I kept succeeding and I was getting A’s and B’s instead of C’s and D’s. Even if my dream of living on a beach didn’t come true I would still want to look back and know that I did well in school. After getting accepted into college, I’ve never felt so accomplished. Cause I knew that I was actually going somewhere in life. Deciding what I wanted to study was a big obstacle. Following a bunch of different research I decided what I was going to study. I decided to study Radiology. It was one of the career fields that fit my personality and it was something that really caught my eye. College graduation was coming faster than I thought it would. Even though it was a huge struggle I pushed myself and go through the rough times. When graduation was finally over I started filling out applications...
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...Friction is what happens when any two things rub against each other. These can be solid things, like your two hands rubbing together, or your skis rubbing on the snow, or a hammer hitting a nail, or they can be gases, like friction with the air slowing down your car, or liquids, like friction with the water slowing down a boat. Nobody completely understands what causes friction. Partly, friction happens when the rough edges of one object snag on the rough edges of another object, and some of the objects' energy has to be used to break off those rough edges so the objects can keep moving. And when you rub two soft things together, like your hands, sometimes they squish into each other and get in each other's way. But even completely smooth, hard things have some friction. This friction is the result of the molecules in both objects being attracted to each other. We know how to make more friction or less friction, and how to predict how much friction there will be. There's more friction when the two objects are pushed together harder. If you push your hands together, it's harder to rub them up and down. If you pull the brake lever harder, your bike will stop faster. Because gravity pulls harder on things with more mass, things with more mass have more friction and are harder to move - a cube of iron will be harder to move than a cube of wood. Two solid things usually have more friction than two liquid things, or one liquid thing and a solid - that's why you slip on a wet surface...
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...the trees. As I walked down the sidewalk, I saw my car parked under a thick layer of snow .My mischievous dogs ran to meet me, leaving trails of paw prints in the snow. I continued to the driveway and scraped some snow off of the car window, and looked inside. The powder chilled my hand, so I put my hand inside my pocket to warm it, the snow began to fall harder. I wandered around the car, and crunched the snow beneath my feet. I hear birds chirping, and stride to the bird feeder, where several small birds hopped around on the ground. The snow was peppered with tiny holes where seeds had fallen from the bird feeder. The birds flew away as I approached them. I continued walking and scooped up some snow from the ground, shaped it into a rough sphere, and threw it at a tree trunk. The snow scattered, falling from the tree and from all the bushes surrounding the tree. As I treaded past the birdbath, I realized the...
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...Hayden stared at the jumble of logs in the stagnant swamp water. He had to catch a fish, he just had to, and it needed to be a big one or his sister would kill him. He whipped the rod forward but a gust of wind blew it directly into the log pile. RATS! Hung up—again! He had already lost four lures today to the swamp’s dangerous vegetation. Now lure number five — a seven-dollar buzz bait — dangled, hopelessly tangled, from a limb. He moved in close to see if he could retrieve it. The boat bumped gently against a log, but the lure was just out of reach. Hayden thought he might be able to grab it if he leaned out enough. Resting an arm on a cypress trunk, he stretched as far as he could. With his knees over the boat’s gunwale, he felt for...
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...to tell they cyclops his name, it shows he's quick to think of a good plan because of him being on the spot when faced with the question. The reason why he says his name is “Nobody” is so when Odysseus attacks the Cyclops. NOBODY is attacking Polyphemus. It’s a clever trick and it would have worked if Odysseus hadn’t revealed later that “‘say Odysseus, raider of cities, he gouged out your eye, Laertes’ son who makes his home in Ithaca!’” (227). This was Odysseus’ biggest mistake in the entire book, because it only caused him further trouble down the line. By telling his name to the Cyclops, Polyphemus can tell Poseidon that it was Odysseus who blinded him. Poseidon will listen because Polyphemus is his son, Poseidon after this causes rough water...
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