Accounting for ROU Asset Impairment
We are analyzing building 'Impairments' functionality for Lease Accounting. Your views/ideas will be helpful in designing this feature.
Q1. What is the popular way of accounting for 'Impairments' out of the three methods
a. Impairment Loss....Dr
Impairment Reserve..Cr
b. Impairment Loss...Dr
ROU Asset ..............Cr
c. Impairment Loss...Dr
Accumulated Amortization....Cr
Q2. Have come across few US customers who want to close Accumulated Amortization amount into ROU Asset during impairments and start fresh with ROU Asset original balance amount. For example:
ROU Original Value=10000
Accumulated Amortisation Bal=5000
Recoverable Value for the asset: 2000
Hence Impairment Loss= (10000-5000)-2000=3000
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