Page 43 - CFA Lecture Day 9 Slides

Session Unit 8:

29. Long-lived Assets
LOS 29.k: Explain and evaluate how impairment, revaluation, and de-recognition of property, plant, and
equipment and intangible assets affect financial statements and ratios. p226

In year of impairment/de-recognition Years subsequent to
impairment/de-recognition

Revaluation, p.227
Impact On

Assets (Carrying value)
tanties
Equity (retained earnings)

D/A; D/E

Net income

ROA

ROE

Asset turnover

Cash flows

CFA watch out:

These could be indications of earnings smoothing, • CFA must check source of revaluation appraisal to
poor depreciation/amortisation judgments support this!