Recoverable Amount of an Asset Is Defined in AASB 136

question 28

Multiple Choice

Recoverable amount of an asset is defined in AASB 136 the higher of its fair value less costs to sell and its value in use.In the case where an asset's carrying amount is less than its recoverable amount,which action is consistent with AASB 136?

• A) Recognise difference as increase is asset revaluation reserve.
• B) Recognise difference as impairment loss.
• C) Recognise difference as gain from reinstatement of asset.
• D) Leave asset at its carrying amount.
• E) None of the given answers.

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Definitions:

Price Floor

A government- or authority-imposed minimum price below which a certain product cannot be sold, typically above the equilibrium price to ensure producers receive a minimum income.

Government

The organizational structure through which a society makes and enforces its public policies and exercises authority over its citizens.

Pencils

Writing or drawing instruments with a thin core of graphite or a similar substance encased in a protective casing.

Nonprice Rationing

Allocating goods or services using means other than prices, such as waiting times or ration coupons, often used when there is a shortage or when market prices are not effective.