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This excerpt taken from the BG 10-K filed Mar 15, 2006. Impairment of Long-Lived Assets—Bunge reviews for impairment its
long-lived assets whenever events or changes in circumstances indicate that
carrying amounts of an asset may not be recoverable. In performing the review
for recoverability, Bunge estimates the future cash flows expected to result
from the use of the asset and from its eventual disposition. If the sum of the
expected future cash flows (undiscounted and without interest charges) is less
than the carrying amount of the asset, an impairment loss is recognized;
otherwise, no impairment loss is recognized. Bunge records impairments related
to long-lived assets used in the processing of its products in cost of goods
sold, which is a component of income from continuing operations before income
tax and minority interest, in the consolidated statements of income. The
measurement of an impairment loss to be recognized for long-lived assets and
identifiable intangibles that Bunge expects to hold and use is the excess of
the carrying value over the fair value of the asset.
Long-lived assets and certain identifiable intangibles to be disposed of are reported at the lower of carrying amount or fair value less cost to sell. |
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