Question 1

Moffatt Ltd had an item of equipment with a carrying amount (cost less accumulated depreciation) of $400 000.The fair value less costs to sell of the equipment is estimated at $380 000,while its value in use is calculated at $388 000.The amount of the impairment loss that would need to be recorded is:

Accepted Answer

A)  $12 000
B)  $0
C)  $20 000
D)  none of the above

Question 2

Which of the following statements is incorrect regarding the guidance given in AASB 136 on the composition of future cash flow estimates?

Accepted Answer

A)  future cash flows are to be estimated based on the asset's current condition
B)  estimates of the future cash flows can include inflows and outflows expected to arise from a future,uncommitted restructuring
C)  estimates of future cash flows are not to include inflows or outflows from financing activities or income tax receipts or payments
D)  estimates of the future cash flows should include projections of inflows from continuing use of the asset

Question 3

Which of the following statements is incorrect regarding the recognition of an impairment loss?

Accepted Answer

A)  when an impaired asset is recorded at cost,the impairment loss must be recognised immediately as an expense in the statement of comprehensive income
B)  any impairment loss of a revalued asset shall be treated as a revaluation decrease in accordance with AASB 116
C)  when an impaired asset is recorded at cost,the impairment loss must be recognised as a revaluation decrease
D)  when an impaired asset is recorded at cost,the impairment loss must be recognised immediately in profit or loss

Question 4

External sources of information that would indicate possible impairment include

Accepted Answer

A)  the carrying amount of the net assets of the entity is more than its market capitalisation
B)  internal reporting indicates that the economic performance of an asset is,or will be,worse than expected
C)  there is evidence of obsolescence or physical damage of an asset
D)  none of the above

Question 5

Which of the following is the first step in recognising an impairment loss for a cash- generating unit?

Accepted Answer

A)  determine the carrying amount of the net assets (including goodwill) of the relevant cash- generating unit
B)  ascertain the recoverable amount of the relevant cash- generating unit
C)  recognise the impairment loss on the cash- generating unit
D)  none of the above

Question 6

Identify the external and internal indications required by AASB 136 to be considered in deciding whether an impairment loss should be reversed.

Accepted Answer

As a minimum,AASB 136 requires the follo...

Question 7

Explain the concept of a cash- generating unit.

Accepted Answer

In some cases,the recoverable amount of ...

Exam 10: Impairment of Assets

Explain the concept of a cash- generating unit.

Correct Answer
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In some cases,the recoverable amount of ...
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Which of the following statements is incorrect regarding the recognition of an impairment loss?

Correct Answer
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External sources of information that would indicate possible impairment include

Correct Answer
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Which of the following statements is incorrect regarding the guidance given in AASB 136 on the composition of future cash flow estimates?

Correct Answer
verified

Which of the following is the first step in recognising an impairment loss for a cash- generating unit?

Correct Answer
verified

Correct Answer
verified

Identify the external and internal indications required by AASB 136 to be considered in deciding whether an impairment loss should be reversed.

Correct Answer
verified
As a minimum,AASB 136 requires the follo...
View Answer

Exam 10: Impairment of Assets

Explain the concept of a cash- generating unit.

Correct AnswerverifiedIn some cases,the recoverable amount of ...View AnswerShow Answer

Which of the following statements is incorrect regarding the recognition of an impairment loss?

Correct AnswerverifiedShow Answer

External sources of information that would indicate possible impairment include

Correct AnswerverifiedShow Answer

Which of the following statements is incorrect regarding the guidance given in AASB 136 on the composition of future cash flow estimates?

Correct AnswerverifiedShow Answer

Which of the following is the first step in recognising an impairment loss for a cash- generating unit?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Identify the external and internal indications required by AASB 136 to be considered in deciding whether an impairment loss should be reversed.

Correct AnswerverifiedAs a minimum,AASB 136 requires the follo...View AnswerShow Answer

Correct Answer
verified
In some cases,the recoverable amount of ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
As a minimum,AASB 136 requires the follo...
View Answer