Delta airlines has determined that several of its planes are impaired. The book

Question

Delta airlines has determined that several of its planes are impaired. The book value of the planes is $10 million, but the fair market value of the planes is $9 million. How would this impairment affect the income statement in the period it is recorded?

If the decline is assumed to be ___A____ the asset impairment of $1,000,000 should be ______B____         ___C___  net income by the same amount.

A.  temporary or permanent

B.  reported as a loss on balance sheet

      reported as allowance on balance sheet

     taken as a loss on the income statement

C. increasing or reducing

Explanation / Answer

A. Permanent. B. Taken as a loss on the income statement. C. Reducing.

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