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Under IFRS the test for asset impairment is to compare the carrying value of the asset to its recoverable amount. Which of the following is the recoverable amount according to IFRS?
A. The greater of future undiscounted cash flows or future discounted cash flows.
B. The greater of future discounted cash flows or fair value.
C. The greater of fair value less cost to sell or value in use.
D. The greater of fair value or value in use.

Respuesta :

sadddamkashmiri801

Answer:

Option C. The greater of fair value less cost to sell or value in use.

Explanation:

The IAS 36 Impairment of Assets says that the impairment must be recognised if the recoverable amount is greater than the cost of the asset and also tells about what actually the recoverable amount actually is.

Recoverable Amount is greater of:

  • Fair Value less Cost to Sell

or

  • Value in use.

So the option C is the correct option.

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