The Fair Value Loss Impairment Model

question 83

Multiple Choice

The fair value loss impairment model

• A) is used for all investments that are not accounted for as FV-NI.
• B) requires a separate impairment test.
• C) calculates the impairment loss as the difference between the asset's fair value and its current carrying amount.
• D) calculates the impairment loss as the difference between the asset's original cost and its current carrying amount.

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Definitions:

Hot Spots

Regions in the Earth's mantle that are exceptionally hot, causing volcanic activity at the Earth's surface, independent of tectonic plate boundaries.

Volcanically Active

Describes a volcano or area that is currently erupting or shows signs of possible eruptions in the future.

Oceanic Plateaus

Large, relatively flat regions of the ocean floor that rise significantly above the surrounding abyssal plains, often formed by volcanic activity.

Basalt

A dark, fine-grained volcanic rock formed from the rapid cooling of basaltic lava exposed at or very near the surface of a planet or moon.