Professor Elam

Weekend Sept 24, 2016

We study impairment charges in Chapter 11 of the Spiceland text. A firm takes an impairment charge when the future undiscounted cash flow is less than the carrying value of the asset.

But it is unusual when a movie studio does this for an unreleased movie!

After spending $125 M to make the movie, Paramount writes off near all of it.

Whoops…..