US GAAP carrying value definition

CFA Level I FRA
#1

Hi All,

I am wondering. How is carrying value defined under GAAP.
I read the following:

Under US GAAP Recoverability. An asset is considered impaired if the carrying value (original cost less accumulated depreciation) is greater than the asset’s future undiscounted cash flow stream.

However then I also read that:

Under U.S. GAAP, most long-lived assets are reported on the balance sheet at depreciated cost (original cost less accumulated depreciation and any impairment charges).

Which is correct or what do I mix up?

To solidify my understanding, under IFRS the balance sheet value is simply either depreciated cost (similar to GAAP) or fair value (under the revaluation model)?

#2

I dont see a conflict between the two modes.

An asset is carried at depreciated cost but is tested for impairment on an annual basis. This test essentially involves a DCF of each business unit, carried out with the auditors using management assumptions if the DCF value is lower, then an impairment charge is booked. This approach replaces goodwill amortisation.

Some fixed assets such as real estate or brands can be valued at fair value through by specialists through a range of methods including DCF. These valuation reports give an estimate of fair market value. Assets can then be marked up or down to reflect this.

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