Question 1

The discount rate used in the determination of the value in use of an asset may be selected from rates used for similar assets in the market.

Accepted Answer

A) True 
 B)False

Question 2

Where an asset is measured using the cost model,any impairment loss is:

Accepted Answer

A) debited to the retained earnings account. 
B) debited to the depreciation expense account. 
C) credited to the asset account. 
D) credited to the accumulated depreciation and impairment losses account. 
A) debited to the retained earnings account. 
B) debited to the depreciation expense account. 
C) credited to the asset account. 
D) credited to the accumulated depreciation and impairment losses account.

Question 3

If an impairment loss is recognised against an asset that has previously been revalued up to fair value,the impairment journal entry must include a reduction of the previously recorded:

Accepted Answer

A) deferred tax asset. 
B) deferred tax liability. 
C) income tax payable. 
D) income tax expense. 
A) deferred tax asset. 
B) deferred tax liability. 
C) income tax payable. 
D) income tax expense.

Question 4

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

Accepted Answer

A) a revaluation decrement. 
B) a revaluation increment. 
C) a set-off against depreciation expense. 
D) an addition to depreciation expense. 
A) a revaluation decrement. 
B) a revaluation increment. 
C) a set-off against depreciation expense. 
D) an addition to depreciation expense.

Question 5

Where an asset is measured using the revaluation model,any impairment loss is recognised immediately in profit and loss.

Accepted Answer

A) True 
 B)False

Question 6

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 Internally generated goodwill
IV Goodwill acquired in a business combination

Accepted Answer

A) I,II and III only 
B) II,III and IV only 
C) I,II and IV only 
D) I,III and IV only 
A) I,II and III only 
B) II,III and IV only 
C) I,II and IV only 
D) I,III and IV only

Question 7

Bella Limited expected future cash flows from the use of equipment as follows: end of year 1 $1500; end of year 2 $4500; end of year 3 $7000.The discount rate was determined as 8%.The value in use of the equipment is:

Accepted Answer

A) $10 804. 
B) $12 037. 
C) $13 000. 
D) $14 040. 
A) $10 804. 
B) $12 037. 
C) $13 000. 
D) $14 040.

Question 8

Under AASB 136 Impairment of Assets,the impairment testing of goodwill occurs at the:

Accepted Answer

A) level of the entity itself. 
B) lowest level at which goodwill is allocated to cash-generating units. 
C) combined segments level. 
D) operating division level. 
A) level of the entity itself. 
B) lowest level at which goodwill is allocated to cash-generating units. 
C) combined segments level. 
D) operating division level.

Question 9

During 2013,Langer Limited estimated that the carrying amount of goodwill was impaired and wrote it down by $100 000.In 2014,the company reassessed goodwill was decided that the old acquired goodwill still existed.The correct accounting treatment in 2014 is:

Accepted Answer

A) reverse the previous goodwill impairment loss. 
B) decrease goodwill by an adjustment to retained earnings. 
C) ignore the reversal as it is prohibited by AASB 136 Impairment of Assets. 
D) increase goodwill by an adjustment to retained earnings. 
A) reverse the previous goodwill impairment loss. 
B) decrease goodwill by an adjustment to retained earnings. 
C) ignore the reversal as it is prohibited by AASB 136 Impairment of Assets. 
D) increase goodwill by an adjustment to retained earnings.

The discount rate used in the determination of the value in use of an asset may be selected from rates used for similar assets in the market.

Where an asset is measured using the cost model,any impairment loss is:

If an impairment loss is recognised against an asset that has previously been revalued up to fair value,the impairment journal entry must include a reduction of the previously recorded:

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

Where an asset is measured using the revaluation model,any impairment loss is recognised immediately in profit and loss.

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 Internally generated goodwill IV Goodwill acquired in a business combination

Bella Limited expected future cash flows from the use of equipment as follows: end of year 1 $1500; end of year 2 $4500; end of year 3 $7000.The discount rate was determined as 8%.The value in use of the equipment is:

Under AASB 136 Impairment of Assets,the impairment testing of goodwill occurs at the:

During 2013,Langer Limited estimated that the carrying amount of goodwill was impaired and wrote it down by $100 000.In 2014,the company reassessed goodwill was decided that the old acquired goodwill still existed.The correct accounting treatment in 2014 is:

Nature and Regulation of Companies

Financing Company Operations

Company Operations

Fundamental Concepts of Corporate Governance

Fair Value Measurement

Accounting for Company Income Tax

Financial Instruments

Foreign Currency Transactions and Forward Exchange Contracts

Property, Plant and Equipment

Leases

Intangible Assets

Business Combinations

Disclosure: Legal Requirements and Accounting Polices

Disclosure: Presentation of Financial Statements

Disclosure: Statement of Cash Flows

Disclosure: Translation of Financial Statements Into a Presentation Currency

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Associates and Joint Ventures

Investments in Joint Arrangements

Insolvency and Liquidation

Filters

Exam 13: Impairment of Assets

The discount rate used in the determination of the value in use of an asset may be selected from rates used for similar assets in the market.

Where an asset is measured using the cost model,any impairment loss is:

If an impairment loss is recognised against an asset that has previously been revalued up to fair value,the impairment journal entry must include a reduction of the previously recorded:

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

Where an asset is measured using the revaluation model,any impairment loss is recognised immediately in profit and loss.

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 Internally generated goodwill IV Goodwill acquired in a business combination

Bella Limited expected future cash flows from the use of equipment as follows: end of year 1 $1500; end of year 2 $4500; end of year 3 $7000.The discount rate was determined as 8%.The value in use of the equipment is:

Under AASB 136 Impairment of Assets,the impairment testing of goodwill occurs at the:

During 2013,Langer Limited estimated that the carrying amount of goodwill was impaired and wrote it down by $100 000.In 2014,the company reassessed goodwill was decided that the old acquired goodwill still existed.The correct accounting treatment in 2014 is:

Nature and Regulation of Companies

Financing Company Operations

Company Operations

Fundamental Concepts of Corporate Governance

Fair Value Measurement

Accounting for Company Income Tax

Financial Instruments

Foreign Currency Transactions and Forward Exchange Contracts

Property, Plant and Equipment

Leases

Intangible Assets

Business Combinations

Disclosure: Legal Requirements and Accounting Polices

Disclosure: Presentation of Financial Statements

Disclosure: Statement of Cash Flows

Disclosure: Translation of Financial Statements Into a Presentation Currency

Consolidation: Controlled Entities

Consolidation: Wholly Owned Subsidiaries

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Associates and Joint Ventures

Investments in Joint Arrangements

Insolvency and Liquidation

Filters