PART A: Arguments for and against the auditors insisting that MPS should begin expensing some parts of the construction costs instead of accumulating the increasing asset.
According to FASB 360-10, it has been specified that the value of an asset need not to be carried at a greater rate than the potentiality of its service. Moreover, this statement of FASB requires that the carrying amount of an asset should be reduced whenever the expectation of the future cash flow is less than its carrying amount. According to the case study, it seems that the Eagle Mountain would finally cost ...
