If an entity does not expect to recover the carrying amount of an asset, the entity has incurred a/an:

A) depreciation expense.
B) amortisation cost.
C) loss on disposal.
D) impairment loss.

Question

If an entity does not expect to recover the carrying amount of an asset, the entity has incurred a/an:A)  depreciation expense.B)  amortisation cost.C)  loss on disposal.D)  impairment loss.

Sweet Jones · Accepted Answer

Final Answer : D, Explanation :  If an entity does not expect to recover the carrying amount of an asset, it means there has been a significant reduction in the asset's value. This results in an impairment loss, which is recognized in the income statement as a separate line item. Therefore, the best choice is option D - impairment loss. Options A, B, and C do not reflect the situation described in the question.

If an entity does not expect to recover the carrying amount of an asset, the entity has incurred a/an:

A) depreciation expense.
B) amortisation cost.
C) loss on disposal.
D) impairment loss.

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