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Questions and Answers
What is the basis for measuring value in use according to the text?
What is the basis for measuring value in use according to the text?
- Historical cost
- Book value
- Future net cash flows (correct)
- Market value
How should cash flow projections beyond 5 years be estimated?
How should cash flow projections beyond 5 years be estimated?
- By ignoring projections beyond 5 years
- By extrapolating the 5-year projections with a steady or declining growth rate (correct)
- Using the initial budget
- Based on the current market conditions
When can an impairment loss for an asset in prior years be reversed?
When can an impairment loss for an asset in prior years be reversed?
- If there has been a change in the accounting method
- If there has been a change in the market value
- If there has been a change in the estimate of the recoverable amount (correct)
- If there has been a change in the inflation rate
What happens to any reversal of an impairment loss on a revalued asset?
What happens to any reversal of an impairment loss on a revalued asset?
How should cashflow projections be based according to the text?
How should cashflow projections be based according to the text?
What is required to estimate cash flow projections beyond 5 years?
What is required to estimate cash flow projections beyond 5 years?
What is impairment of fixed assets?
What is impairment of fixed assets?
According to the basic principle, an asset should not be carried above which amount?
According to the basic principle, an asset should not be carried above which amount?
What are some external sources indicating possible impairment of fixed assets?
What are some external sources indicating possible impairment of fixed assets?
How is the recoverable amount of an asset calculated?
How is the recoverable amount of an asset calculated?
What does the fair value of an asset represent?
What does the fair value of an asset represent?
What does the Cost of Disposal refer to in relation to asset impairment?
What does the Cost of Disposal refer to in relation to asset impairment?
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