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Dis 6 G
Dis 6 G
Dis 6 G
in the consolidated balance sheet. Unlike amortization, which periodically reduces asset
values, impairment must first be revealed before a write-down is justified. The concerns
regarding impairment testing involves recurring costs and complexity of performing these
tests. Whether it is cost effective, or cost more in the long run depends on how
streamlined their testing processes are. Companies these days usually follow an approach
of qualitative assessments to determine when additional quantitative testing is necessary.
To arrive at the possible value of the write-offs, companies must be judicious in
revaluations and when the reinvestments are needed. Not to mention valuation
professionals are expensive to hire, and the overall process is very complicated which
warrants judicious insights. The overall goal should be to reduce associated costs and
complexity.
Response 1: