Which of the Following Is an Impairment Indicator for Property

question 98

Multiple Choice

Which of the following is an impairment indicator for property, plant and equipment?

• A) a significant decrease in the purchase price of an asset or asset group scheduled to be acquired in the current period
• B) a significant adverse change in legal factors that could affect the value of the asset or asset group
• C) a significant increase in the purchase price of an asset or asset group scheduled to be acquired in the current period
• D) a significant increase in the market price of an asset or asset group

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Definitions:

Opportunity Cost

The loss of potential gain from other alternatives when one option is chosen.

Accounting Profits

The difference between total revenue and explicit costs of a business, calculated using principles of accounting.

Economic Profits

The surplus left after total costs (including both explicit and implicit costs) are subtracted from total revenues.

Short-Run Marginal Costs

Costs associated with producing one more unit of a good or service in the short term, where some inputs are fixed.