Multiple choice 1 and 21.It is the present value of estimated future cash flows expected to arise from the continuing use of an asset (or CGU) and from its disposal at the end of its useful life.Use in value Recoverable amountFair value less costs to sell Value in use 2.The gain on impairment loss reversal of an asset which is recognized in profit or loss is computed asthe difference between the recoverable amount on date of reversal and the carrying amount on date of reversalthe difference between the recoverable amount on date of reversal and carrying amount of the asset had no impairment loss been recognized previouslythe difference between the carrying amount of the asset had no impairment loss been recognized previously and the carrying amount of the asset on the date of reversalthe difference between the carrying amount of the asset had no impairment loss been recognized previously and the recoverable amount on the date of the previous impairment testing.

Solution:- Introduction:- Impairment of asset is an accounting term which is used to calculate…

Answered: 1.It is the present value of estimated…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Multiple choice 1 and 2

1.It is the present value of estimated future cash flows expected to arise from the continuing use of an asset (or CGU) and from its disposal at the end of its useful life.

1. Use in value
2. Recoverable amount
3. Fair value less costs to sell
4. Value in use

2.The gain on impairment loss reversal of an asset which is recognized in profit or loss is computed as

1. the difference between the recoverable amount on date of reversal and the carrying amount on date of reversal
2. the difference between the recoverable amount on date of reversal and carrying amount of the asset had no impairment loss been recognized previously
3. the difference between the carrying amount of the asset had no impairment loss been recognized previously and the carrying amount of the asset on the date of reversal
4. the difference between the carrying amount of the asset had no impairment loss been recognized previously and the recoverable amount on the date of the previous impairment testing.

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