IAS 36 (Impairment of Assets) Exam Questions & Answers 2024/2025
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Module
IAS 36
Institution
IAS 36
IAS 36 (Impairment of Assets) Exam Questions & Answers 2024/2025
IAS 36 Does not Apply To - ANSWERS* Inventories.
* Investment Property measured at FV.
* Financial Assets in the Scope of IFRS 9.
Impairment Loss - ANSWERSAmount by Which CARRYING VALUE EXCEEDS RECOVERABLE AMOUNT
Reva...
IAS 36 (Impairment of Assets) Exam
Questions & Answers 2024/2025
IAS 36 Does not Apply To - ANSWERS* Inventories.
* Investment Property measured at FV.
* Financial Assets in the Scope of IFRS 9.
Impairment Loss - ANSWERSAmount by Which CARRYING VALUE EXCEEDS RECOVERABLE AMOUNT
Revaluation Decrease - ANSWERSAmount by which CARRYING AMOUNT EXCEEDS FAIR VALUE
Recoverable Amount - ANSWERSHIGHER of FAIR VALUE LESS COSTS TO SELL and VALUE IN USE
Fair Value Less Costs to Sell - ANSWERSThe FAIR VALUE of an asset NET of the COSTS that are associated
with DISPOSING of the asset.
Also called NET SELLING PRICE.
Value In Use - ANSWERSThe NET PRESENT VALUE of the FUTURE CASH FLOWS expected from an asset,
INCLUDING SELLING PRICE
* INFLOWS from operations LESS OUTFLOWS.
* Based on MANAGEMENT'S BEST ESTIMATES and APPROVED BUDGETS.
* DISCOUNT RATE to be PRE-TAX.
, When Do We Impair? - ANSWERS* When CARRYING VALUE EXCEEDS RECOVERABLE AMOUNT.
* At END of EACH REPORTING PERIOD.
* When there is an INDICATION of IMPAIRMENT. The indication can be either EXTERNAL or INTERNAL.
* When there is an indication of impairment, the assets useful life, depreciation method and residual
value must also be assessed.
Why do We Impair? - ANSWERSThe REALIZABLE ECONOMIC BENEFITS that are expected from the asset is
LESS THAN the STATED AMOUNT. It is in line with faithful representation to disclose it at the amount
expected to be realized in reality. This is the recoverable amount.
External Indicators of Impairment - ANSWERS* Significant DECREASE IN asset's MARKET VALUE.
* CHANGES with ADVERSE EFFECTS such as LEGISLATION or TECHNOLOGY.
* FACTORS AFFECTING DISCOUNT RATE.
* CARRYING AMOUNT EXCEEDS MARKET CAPITALIZATION.
Internal Indicators of Impairment - ANSWERS* TECHNICAL OBSOLESCENCE of asset.
* MATERIAL DAMAGE suffered by the asset.
* INTERNAL PLANS to RESTRUCTURE or DISCONTINUE.
* Expectation that PERFORMANCE will WORSEN.
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