CAF-1 · Chapter 5 · Question 1 of 15
Under IAS 36, an asset is impaired when its carrying amount exceeds its 'recoverable amount'. How is the recoverable amount defined?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) The higher of its fair value less costs of disposal and its value in use.
Explanation
IAS 36 defines the recoverable amount of an asset (or a cash-generating unit) strictly as the higher of its fair value less costs of disposal and its value in use.
More IAS 36 Impairment of Assets MCQs
- 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?
- Q6Which of the following assets is OUTSIDE the scope of IAS 36 Impairment of Assets?
- Q7Which of the following represents an INTERNAL indication that an asset may be impaired?