Project #17476 - Impairment analysis

Assignment Requirements

1.       Prepare a memorandum of the accounting requirements for the impairment of long-lived assets under US GAAP and IFRS including a comparison of the two methods.  You must provide citations to the Accounting Standards Codification (ASC) and the International Accounting Standards (IAS) in your report. 

2.       In an excel spreadsheet, create an estimate of the impairment calculation prepared by the company or the auditors for the nine capesize vessels listed in table 1 using US GAAP.  For each of the estimates used, provide support as to why you used that estimate.  Support for your estimates should come from the shipbroker reports, the company’s filings with the SEC, or other reliable information.  Treat these estimates as if you were an audit staff person creating workpapers for partner review (your support for the estimates can either be provided in the spreadsheet or in the memo). 

3.       In an excel spreadsheet, create an estimate of the impairment calculation prepared by the company for the nine capesize vessels listed in table 1 using IFRS.  Again support all of your estimates. 

4.       In the memo prepared in question one, answer the following additional questions.

a.        Which estimates have the greatest impact on the company’s impairment calculation using US GAAP?

b.      If the company filed using IFRS, does that change your calculation and estimate of impairment?   

c.       In the December 31, 2012 financial statements, the company has not impaired the vessels, do you agree or disagree with the company’s estimates?

d.      Which accounting standard do you think provides more reliable financial statements in regards to asset impairment, US GAAP or IFRS and why?

             5. How does the book value per share compare to the stock price?  Do you think the stock should be trading at the book value per share?

Subject Business
Due By (Pacific Time) 12/03/2013 12:00 am
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