CAF-1 · Chapter 5 · Question 14 of 15
If an asset's fair value less costs of disposal is found to be greater than its carrying amount, what is the next required step under IAS 36?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Conclude the asset is not impaired and do not estimate value in use.
Explanation
If fair value less costs of disposal exceeds the carrying amount, the asset is not impaired, and it is not necessary to estimate the value in use.
More IAS 36 Impairment of Assets MCQs
- Q1Under IAS 36, an asset is impaired when its carrying amount exceeds its 'recoverable amount'. How is the recoverable amount defined?
- Q2When calculating the 'value in use' of an asset for impairment testing, which discount rate should be applied to future cash flows?
- Q3An entity previously recognized an impairment loss on an asset carried under the cost model. If the reasons for the impairment…
- Q4Under IAS 36, when is an asset considered to be impaired?
- Q5Which of the following is defined as the 'value in use' of an asset?