The core difference between the rational entity impairment model (IFRS) and the cost recovery impairment model (ASPE) is that the IFRS approach waits until circumstances indicate that conditions are very bad before recognizing an impairment. the IFRS approach captures only declines in value, with no later recognition of any recovery. there are many differences; all of the above are true of the IFRS approach as compared to ASPE. the IFRS approach better reflects the economic circumstances underlying the asset’s usefulness to the entity.
The core difference between the rational entity impairment model (IFRS) and the cost recovery impairment model (ASPE) is that the IFRS approach waits until circumstances indicate that conditions are very bad before recognizing an impairment. the IFRS approach captures only declines in value, with no later recognition of any recovery. there are many differences; all of the above are true of the IFRS approach as compared to ASPE. the IFRS approach better reflects the economic circumstances underlying the asset’s usefulness to the entity.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The core difference between the rational entity impairment model (IFRS) and the cost recovery impairment model (ASPE) is that
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the IFRS approach waits until circumstances indicate that conditions are very bad before recognizing an impairment.
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the IFRS approach captures only declines in value, with no later recognition of any recovery.
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there are many differences; all of the above are true of the IFRS approach as compared to ASPE.
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the IFRS approach better reflects the economic circumstances underlying the asset’s usefulness to the entity.
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Transcribed Image Text:Practice Question 12
The core difference between the rational entity impairment model (IFRS) and the cost recovery impairment model (ASPE) is that
the IFRS approach waits until circumstances indicate that conditions are very bad before recognizing an impairment.
the IFRS approach captures only declines in value, with no later recognition of any recovery.
there are many differences; all of the above are true of the IFRS approach as compared to ASPE.
the IFRS approach better reflects the economic circumstances underlying the asset's usefulness to the entity.
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