IAS 36 Impairment Quiz
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Questions and Answers

What does IAS 36 primarily deal with?

  • Recognition of Revenue
  • Impairment of Assets (correct)
  • Inventory Valuation
  • Financial Instruments
  • Which of the following is a key step in testing for impairment under IAS 36?

  • Comparing the asset's carrying amount to its recoverable amount (correct)
  • Estimating future market value of the asset
  • Assessing the original cost of the asset
  • Calculating the asset's depreciation over time
  • Under IAS 36, when should an entity perform an impairment test for an asset?

  • When the asset's book value exceeds its original cost
  • When there are indications of impairment (correct)
  • At the end of each financial year
  • When the asset's market value increases
  • Under IAS 40, investment property should be accounted for using which method?

    <p>Fair value model</p> Signup and view all the answers

    Which of the following is a key criterion for classifying a property as investment property under IAS 40?

    <p>Property held for sale in the ordinary course of business</p> Signup and view all the answers

    How should gains or losses from changes in fair value of investment property be recognized under IAS 40?

    <p>Recognized in profit or loss</p> Signup and view all the answers

    Study Notes

    IAS 36: Impairment of Assets

    • IAS 36 primarily deals with the impairment of assets.
    • A key step in testing for impairment under IAS 36 involves comparing the asset's carrying amount with its recoverable amount.
    • An entity should perform an impairment test for an asset when there are indicators of impairment.

    IAS 40: Investment Property

    • Under IAS 40, investment property should be accounted for using the fair value model, where the property's value is measured at fair value, with changes in fair value recognized in profit or loss.
    • A key criterion for classifying a property as investment property under IAS 40 is that it is held to earn rental income or for capital appreciation.
    • Gains or losses from changes in fair value of investment property should be recognized in profit or loss under IAS 40.

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    Description

    Test your knowledge of International Accounting Standards 36 (IAS 36) with this quiz. Explore the primary focus of IAS 36, key steps in testing for impairment, and the timing for performing an impairment test for an asset as per the standard.

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