The definition of fair value as defined in ASC 820: the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Accounting Standards Codification ASC 360 (including Property, Plant and Equipment)
In July, 2009, when the Financial Accounting Standards Board launched the Accounting Standards Codification (the FASB ASC). The FASB ASC replaced all previously existing financial accounting standards (other than U.S. Securities and Exchange Commission pronouncements) to become the single source of authoritative nongovernmental U.S. generally accepted accounting principles. Instead of issuing new standards (e.g., SFAS 141R), the FASB issues updates to the FASB ASC.
As part of ASC 360 "Accounting for the impairment or Disposal of Long-Lived Assets" Cambridge Partners assists companies by performing an initial impairment test of a company's long-lived assets. If the results of the initial test (Step 1) determine that the carrying values (CV) of the long-lived assets are not recoverable from their undiscounted cash flows (UCF), then recognition of impairment may be required.
Failing an ASC 360 Step 1 test, each long-lived asset group's discounted cash flows are then compared with their fair value and any impairment loss measured as the difference between the excess of their carrying amounts over their fair values.
It is customary to perform an ASC 350 "Goodwill and other Intangible Assets" impairment test in tandem with the ASC 360 analysis. As outlined in ASC 350, the procedure for measuring goodwill impairment is a two-step process. A critical step is to test whether the carrying value of goodwill may be impaired; if impairment exists, then the second step analysis is performed to measure the amount of impairment.