Exam 15: Impairment of Assets

In allocating an impairment loss, an entity shall not reduce the carrying amount of an asset below the highest of:

During 2013 Sacco Limited, estimated that the carrying amount of goodwill was impaired and wrote it down by $50 000. In 2014, the company reassessed goodwill was decided that the old acquired goodwill still existed. The appropriate accounting treatment in 2014 is:

When goodwill is acquired under a business combination it is subject to an impairment test every:

The impairment test for goodwill must be conducted:

Constructor Limited estimated an impairment loss of $500 against its single cash- generating unit. The company had the following assets: Headquarters Building $1000; Construction Plant $600; Equipment $400. The net carrying amount of the Equipment after allocation of the impairment loss is:

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

When evaluating whether an asset has been impaired, the carrying amount of the asset must be compared to recoverable amount. Recoverable amount is the higher of:

At reporting date, the carrying amount of a cash-generating unit was considered to be have been impaired by $900. The unit included the following assets: Land $4000; Plant $3000; Goodwill $500. The amount of impairment allocated to the land is:

According to IAS 36 Impairment of Assets, the recoverable amount test requires an entity to compare the fair value an asset less costs to sell, with:

When assessing the recoverable of assets that have previously been subject to an impairment loss, which of the following indicators assist in providing external evidence that an impairment loss has reversed:

Under IAS 36 Impairment of Assets, the following assets are subject to impairment testing:

In relation to the impairment of assets, IAS 36 Impairment of Assets, requires the following disclosures for each class of assets: I The line of the statement of profit or loss and other comprehensive income in which impairment losses are included. II The amount of reversals of impairment losses during the period. III The amount of impairment losses recognised directly in other comprehensive income. IV The beginning and ending balances of any 'provision for impairment' account.

Value in use is:

Which of the following assets need to be tested for impairment every year? I intangible assets with indefinite useful lives II intangible assets not yet available for use III intangible assets accounted for under the revaluation method IV goodwill acquired in a business combination

Jam Pty Ltd has two cash generating units. CGU A had a carrying amount of $700 and value in use of $750. CGU B has a carrying amount of $900 and a value in use of $800. The carrying amount of the head office assets is $400. CGU A & B utilise the head office services equally. The impairment loss for CGU A is:

When an asset is measured using the revaluation model, any impairment loss is treated as:

Which of the following is required to be disclosed for each class of assets? I the amount of impairment losses recognised in profit or loss during the period II the amount of reversals of impairment losses recognised in profit or loss during the period III the amount of impairment losses on revalued assets recognised directly in equity during the period; and IV the amount of reversals of impairment losses on revalued assets recognised directly in other comprehensive income during the period.

An impairment loss occurs when:

Candy Limited expected future cash flows from the use of Equipment as follows: End of Year 1 $4000; End of Year 2 $5000; End of Year 3 $2000. The discount rate was determined as 5%. The value in use of the equipment is:

At reporting date Guilder Limited estimated an impairment loss of $50 000 against its single cash-generating unit. The company had the following assets: Headquarters Building $100 000; Plant $60 000; Equipment $40 000. The net carrying amount of the Plant after allocation of the impairment loss is: