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Exam 13: Impairment of Assets

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Where an asset is measured using the cost model,any impairment loss is recognised immediately in profit and loss.

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AASB 136 Impairment of Assets requires disclosures about estimates and judgements made in the impairment testing process.

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The recoverable amount of an asset is defined as the lower of the fair value less costs of disposal and value in use.

According to AASB 136 Impairment of Assets,the recoverable amount of an asset or cash-generating asset is the:

A cash generating unit is defined in AASB 136 Impairment of Assets as the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

Where the carrying amount of an asset exceeds the fair value less costs of disposal,it is necessary to calculate the value in use of the asset to determine whether it is impaired.

Kerri Limited recognised an impairment loss on an item of plant asset on the 30th June.The recoverable amount of the asset after the loss is $900 and the asset has an estimated useful life of 4 years.Accumulated depreciation was $250 at that date and the straight line depreciation method is used.The original cost of the asset was $2500.The future annual depreciation amount is:

When an asset is measured at fair value,the appropriate journal entry to record an impairment loss will include which of the following entries?

Cash-generating units should be identified consistently from period to period for the same group of assets.

Intangible assets that are not yet available for use are not required to be tested for impairment.

According to AASB 136 Impairment of Assets,which of the following indicators assist in providing external evidence that an impairment loss has reversed?

The impairment test involves comparing the asset's:

In allocating an impairment loss,an entity shall not reduce the carrying amount of an asset below the highest of:

In relation to the impairment of assets,AASB 136 Impairment of Assets requires which of the following disclosures for each class of assets? I The line item(s) of the income statement in which impairment losses are included. II The amount of reversals of impairment losses on revalued assets. III The amount of impairment losses recognised in profit or loss. IV The amount of impairment losses on revalued assets.

Which of the following is not one of the guidelines in AASB 136 Impairment of Assets for identifying a cash-generating unit?

Under AASB 136 Impairment of Assets,impairment of an asset and the accounting treatment using the cost model are which of the following?

When a cash generating unit containing goodwill is impaired,the impairment loss is allocated on a pro-rata basis across all of the assets in the cash generating unit.

Any costs arising after the sale of an asset are included in the disposal costs of that asset.

The amount by which the carrying amount of an asset or a cash-generating unit exceeds its carrying amount is referred to as a/an:

The smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets is referred to as a/an: