A company performing its long-lived asset impairment testing is reviewing the fair value of equipment. Each of the following valuation techniques may be appropriate for measuring the fair value of the equipment, except the: a. Market approach.
b. Income approach.
c. Cost approach.
d. Net realizable value approach.

d. Net realizable value approach.

Explanation:

An impairment usually arises when a company's asset (either intangible or fixed asset) overall future cash-flow ability (fair value) is lesser than its carrying value. This impairment of assets may be as a result of varying consumer demands, recession, damages, inflation or even a change in legal conditions.

For a long-lived asset, if its carrying value exceeds its fair value and isn't really recoverable, there's an impairment loss on the asset.

In the event that, a company performing its long-lived asset impairment testing is reviewing the fair value of equipment. Each of the following valuation techniques may be appropriate for measuring the fair value of the equipment;

1. Market approach: this measures and analyzes whether there's a decline in the market price of the asset.

2. Income approach: this determines if there were any operating or cash-flow losses on the asset.

3. Cost approach: this is an approach used to determine the level of cost associated with purchasing, maintaining and fabricating the asset.

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