Issues: * How should Home Computer classify the disposal of the assets of the video monitor operations? Explain. * Is the video monitor operations involved any impaired? Explain. * How should Home Computer classify the disposal of the assets of the printer operations? Explain * Is the printer operations involved any impaired? Explain.

Analysis: Home Computer is a publicly held manufacturer and retailer of the computer and it has three business segments which are computer manufacturing, printer manufacturing and retail store distribution. However on February 3, 2002, Home Computer wanted to discontinue its video monitor operations at the Seattle and then establishment of a replacement facility in Sacramento. According to ASC 360-10-35-21(f); A long-lived asset (asset group) shall be tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable -- A current expectation that, more likely than not, a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The term more likely than not refers to a level of likelihood that is more than 50 percent. Since Home Computer wanted to move the video monitor operation to CA, the discontinue operation of the video monitor is satisfied to take the recoverability test and to see if any impairment occurs. According to ASC 360-10-35-17, impairment occurs when the sum of expected future net cash flows is less than the asset’s carrying amount. In this case, the current book value of the video monitor operations is $8 million, and expect future cash flows $3.5 million. So the expect future cash flow is less than the carrying amount and my conclusion is that there is impairment occurred.
According to ASC 360-10-35-23, for purposes of recognition and measurement of an