Assessing asset impairment

What standard currently covers the impairment of tangible assets?

IAS 38

IAS 16

IFRS 9

IAS 36

When is an impairment review needed for a tangible asset?

When an indication of impairment arises

If the present value of cash flows is diminished

Every five years, minimum

Annually

When is an asset impaired?

If the fair value less costs to sell exceeds the carrying amount

If the carrying amount exceeds the value in use

If the carrying amount exceeds the recoverable amount

If the value in use exceeds fair value less costs to sell

Which of these items are included within the definition of recoverable amount? Item 1 - Value in use, or item 2 - Fair value less costs to sell

Both items

Item 1 only

Neither item

Item 2 only

Which of the following assets is not covered by the impairment rules of IAS 36?

Long-term loans issued

Property, plant and equipment

Intangible assets

Leased assets

Under IFRS 16 Leases, how should right-of-use assets be recognised?

At present value of lease payments, less direct costs

At present value of the lease payments, plus direct costs

None of these

At fair value, determined at the commencement of the lease

Which of these items would be subject to the rules of IAS 36?

All of these

Investment property held under the fair value model

An investment in equity shares

A right-of-use asset held under a lease

Where will impairment losses be recorded in respect of assets held under the cost model?

In the profit or loss

If temporary, only included as a disclosure note

In a loss reserve

In other comprehensive income

Which, if any, of the following statements is correct? Statement 1 - Goodwill impairment can be reversed when conditions return to normal, or statement 2 - Goodwill impairment is outside the scope of IAS 36

Statement 1 only is correct

Both statements are correct

Neither statement is correct

Statement 2 only is correct

In a business reorganisation, which of these CANNOT happen in respect of the goodwill applied to a cash-generated unit?

It could be written off if the unit is disposed

It could be reallocated across other units

It could be revalued upwards if the goodwill has increased

All of theses can happen

Assessing asset impairment

What standard currently covers the impairment of tangible assets?

When is an impairment review needed for a tangible asset?

When is an asset impaired?

Which of these items are included within the definition of recoverable amount? Item 1 - Value in use, or item 2 - Fair value less costs to sell

Which of the following assets is not covered by the impairment rules of IAS 36?

Under IFRS 16 Leases, how should right-of-use assets be recognised?

Which of these items would be subject to the rules of IAS 36?

Where will impairment losses be recorded in respect of assets held under the cost model?

Which, if any, of the following statements is correct? Statement 1 - Goodwill impairment can be reversed when conditions return to normal, or statement 2 - Goodwill impairment is outside the scope of IAS 36

In a business reorganisation, which of these CANNOT happen in respect of the goodwill applied to a cash-generated unit?

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