Podcast
Questions and Answers
What is defined as the amount an asset could be sold for, less direct selling costs?
What is defined as the amount an asset could be sold for, less direct selling costs?
- Recoverable amount
- Value in use
- Fair value less costs to sell (correct)
- Carrying amount
An impairment review is required every year for all tangible assets.
An impairment review is required every year for all tangible assets.
False (B)
What should be disclosed in the notes to the Profit and Loss statement if an asset is impaired?
What should be disclosed in the notes to the Profit and Loss statement if an asset is impaired?
Impairment losses
The __________ is the higher of fair value less costs to sell or value in use.
The __________ is the higher of fair value less costs to sell or value in use.
Which of the following is NOT an indicator of impairment?
Which of the following is NOT an indicator of impairment?
Match the following terms with their definitions:
Match the following terms with their definitions:
If the recoverable amount of an asset is less than its carrying value, an impairment loss must be recognized.
If the recoverable amount of an asset is less than its carrying value, an impairment loss must be recognized.
What action should be taken if an impairment loss is recognized on a revalued asset?
What action should be taken if an impairment loss is recognized on a revalued asset?
An impairment review is only needed when there is an indication of possible __________.
An impairment review is only needed when there is an indication of possible __________.
Which of the following is an example of an indicator of impairment?
Which of the following is an example of an indicator of impairment?
What is the recoverable amount for Asset B?
What is the recoverable amount for Asset B?
An asset is deemed impaired when its carrying value is less than its recoverable amount.
An asset is deemed impaired when its carrying value is less than its recoverable amount.
What two calculations are used to determine recoverable amount?
What two calculations are used to determine recoverable amount?
An impairment loss is recorded as a debit to _____ and a credit to the asset account.
An impairment loss is recorded as a debit to _____ and a credit to the asset account.
The recoverable amount is lower than both the net selling price and the value in use of an asset.
The recoverable amount is lower than both the net selling price and the value in use of an asset.
List the three types of assets that require an impairment review.
List the three types of assets that require an impairment review.
What is the primary factor that determines the amortisation of intangible assets?
What is the primary factor that determines the amortisation of intangible assets?
Intangible assets with an indefinite life require annual impairment reviews.
Intangible assets with an indefinite life require annual impairment reviews.
What is the purpose of conducting an impairment review?
What is the purpose of conducting an impairment review?
Intangible assets that have an indefinite life are subject to an annual ______ review.
Intangible assets that have an indefinite life are subject to an annual ______ review.
Match each indicator of impairment with its correct description:
Match each indicator of impairment with its correct description:
Flashcards
Impairment of assets
Impairment of assets
A reduction in an asset's recoverable amount below its carrying amount.
Recoverable amount
Recoverable amount
The higher of fair value less costs to sell or value in use.
Fair value less costs to sell
Fair value less costs to sell
The amount an asset can be sold for, minus direct selling costs.
Value in use
Value in use
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Impairment review
Impairment review
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Annual impairment reviews
Annual impairment reviews
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Indicators of impairment
Indicators of impairment
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Impairment loss
Impairment loss
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Carrying value
Carrying value
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Disposal value
Disposal value
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Asset Impairment
Asset Impairment
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Asset (in impairment)
Asset (in impairment)
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Intangible Asset Amortization
Intangible Asset Amortization
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Indefinite Useful Life
Indefinite Useful Life
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Useful Economic Life
Useful Economic Life
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Financial Statements
Financial Statements
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Study Notes
Financial Statement Focus Notes
- This study guide covers financial statements for AAT Level 4.
- It provides focus notes for various topics including regulatory frameworks, the conceptual framework, property, plant and equipment, intangible assets, impairments, inventories, taxation, leases, provisions and events after the reporting period, company finance, company financial statements, statement of cash flows, interpreting financial statements, and consolidated accounts: associates.
- The document is authored by Kaplan Publishing.
- The document is intended to support AAT Level 4 studies.
AAT Focus Notes Content Outline
- Includes a table of contents with chapter titles and page numbers, helping students to quickly navigate through different topics
- Each chapter details learning objectives for the students
- Each chapter provides content about the topic including definition, accounting requirements, disclosures, illustrations with problem scenarios and solutions, summaries, further reading, and possible questions for review.
- Provides additional tutor resources and guidance to enhance the learning experience.
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Description
Test your knowledge on asset impairment and recovery. This quiz covers concepts such as fair value, impairment reviews, and recoverable amounts. Understand the indicators of impairment and the necessary disclosures for financial reporting.
