Ch. 10 - Impairment of Assets

Question 1

Impairment of Assets - IAS #

Answer 1

36

Question 2

Asset grouping for impairment review

Answer 2

when individual assets cannot be reviewed, they will be reviewed as cash generating units

Question 3

When to test for impairment:

Answer 3

1. indicators of impairment

2. annual tests for select assets

Question 4

The recoverable amount is the higher of:

Answer 4

1. the fair value less costs of disposal, and

2. value in use

Question 5

The value in use is:

Answer 5

the discounted future cash flows

Question 6

Impairment loss on CGUs - how to record

Answer 6

1. to goodwill, if any exists

2. to remaining assets on a pro-rata basis

Question 7

Reversal of impairment loss

Answer 7

can be reversed to the lesser of recoverable and carrying amount, had no impairment been recorded

Question 8

ASPE - level of asset grouping

Answer 8

ASPE refers to asset groups, which is typically larger than CGUs (more detailed)

Question 9

ASPE - when to test for impairment

Answer 9

when events or circumstances indicate the carrying amount may not be recoverable, does not include annually also as IFRS does

Question 10

ASPE - Asset is impaired if:

Answer 10

undiscounted future cash flows is less than carrying value

Question 11

ASPE - Impairment loss is equal to:

Answer 11

1. fair value less carrying amount

2. if FV is not known, use PV of expected cash flows

Question 12

ASPE - reversal of impairment

Answer 12

ASPE does not allow the reversal of impairment

Question 13

Assets are impaired if (ASPE and IFRS):

Answer 13

The carrying amount is not recoverable

Question 14

Impairment loss is equal to:

1. IFRS
2. ASPE

Answer 14

1. Carrying amount - Recoverable amount

2. Carrying amount - Fair value