When evaluating whether an asset has been impaired, the carrying amount of the asset must be compared to recoverable amount. Recoverable amount isthe higher ofO Initial Cost and Fair ValueO Original Cost and Net Present ValueO Fair Value Less Cost to Sell and Value in UseO Value in Use and Original Cost Choose the incorrect statement concerning the half-year convention as it applies to depreciation.O It reduces the accelerated nature of the deductionO It adds a vear to the class life of the asset for tax purposesO It can be used only for tax purposesO It results in a depreciation rate equal to the straight-line based on class life in the first year of the asset's life

1) Impairment loss is the amount by which the carrying amount of an asset is exceeds its recoverable…

Vhen evaluatin Ing whethe netner an asset has been impaired, th the higher of O Initial Cost and Fair Value Original Cost and Net Present Value Fair Value Less Cost to Sell and Value in Use Value in Use and Original Cost

Vhen evaluatin Ing whethe netner an asset has been impaired, th the higher of O Initial Cost and Fair Value Original Cost and Net Present Value Fair Value Less Cost to Sell and Value in Use Value in Use and Original Cost

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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Question

When evaluating whether an asset has been impaired, the carrying amount of the asset must be compared to recoverable amount. Recoverable amount is
the higher of
O Initial Cost and Fair Value
O Original Cost and Net Present Value
O Fair Value Less Cost to Sell and Value in Use
O Value in Use and Original Cost

Choose the incorrect statement concerning the half-year convention as it applies to depreciation.
O It reduces the accelerated nature of the deduction
O It adds a vear to the class life of the asset for tax purposes
O It can be used only for tax purposes
O It results in a depreciation rate equal to the straight-line based on class life in the first year of the asset's life

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