How Does the Definition of Asset Impairment Differ Between IAS

question 21

Multiple Choice

How does the definition of asset impairment differ between IAS 36 and U.S. GAAP?

• A) U.S. GAAP does not consider selling price in determining impairment, but IAS 36 does.
• B) U.S. GAAP considers cash flows in assessing value of continued use, but does not discount them, whereas IAS 36 requires discounting in assessing asset impairment.
• C) Asset impairment is more likely to occur under IAS 36 than under U.S. GAAP.
• D) All of the above are differences between IAS 36 and U.S. GAAP.

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Definitions:

Fixed Exchange Rate

A rate of exchange that is set in some way and therefore prevented from rising or falling with changes in currency supply and demand.

FX Reserves

Foreign exchange reserves, assets held on reserve by a central bank in foreign currencies, used to back liabilities on their own issued currency as well as to influence monetary policy.

Foreign Investment

The investment of capital by individuals, firms, or governments in business interests located in another country.

Consumer Spending

The total amount of money spent by households and individuals on goods and services within a specific period, a critical indicator of economic health.