Statement 1: In impairment loss, the discount rate being used is the current pretax rate that reflects the current assessment of the time value of money and the risks specific to the asset. It shall not reflect risk for which the future cash flow estimates have already been adjusted. Statement 2: In computing for impairment of intangible asset with indefinite life, future cash flows are divided by the risk-adjusted discount
Statement 1: In impairment loss, the discount rate being used is the current pretax rate that reflects the current assessment of the time value of money and the risks specific to the asset. It shall not reflect risk for which the future cash flow estimates have already been adjusted. Statement 2: In computing for impairment of intangible asset with indefinite life, future cash flows are divided by the risk-adjusted discount
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Statement 1: In impairment loss, the discount rate being used is the current pretax rate that reflects the current assessment of the time value of money and the risks specific to the asset. It shall not reflect risk for which the future cash flow estimates have already been adjusted.
Statement 2: In computing for impairment of intangible asset with indefinite life, futurecash flows are divided by the risk-adjusted discount rate to get the present value.
Statement 2: In computing for impairment of intangible asset with indefinite life, future
Statements 1 and 2 are true.
Statement 1 is true while Statement 2 is false.
Statement 1 is false while Statement 2 is true.
Statements 1 and 2 are false.
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