CAF-1 · Chapter 5 · Question 11 of 15
When reversing an impairment loss for an asset (other than goodwill), what is the upper limit for the new carrying amount?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized.
Explanation
A reversal cannot lead to a carrying amount higher than what it would have been, net of depreciation, if no impairment had occurred.
More IAS 36 Impairment of Assets MCQs
- Q13When calculating the value in use, which of the following should NOT be included in the estimated future cash flows?
- Q14If 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…
- Q15What type of discount rate should be used when calculating the value in use of an asset?
- 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?