According to AASB 136 the Recoverable Amount of an Asset

question 41

Multiple Choice

According to AASB 136 the recoverable amount of an asset or cash-generating unit is the:

• A) lower of its fair value less costs of disposal and its value in use.
• B) lower of its fair value plus costs of disposal and its value in use.
• C) higher of its fair value less costs of disposal and its value in use.
• D) higher of its fair value plus costs of disposal and its value in use.

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Definitions:

Leverage Levels

The degree to which a business or investor is utilizing borrowed money.

EPS

Earnings Per Share, a company's profit divided by its number of outstanding shares of common stock, indicating how much money each share earns.

EBIT

The measure known as Earnings Before Interest and Taxes determines a company's profit levels by excluding interest and tax-related expenses.

Financial Leverage

The use of borrowed funds with the intent to increase the return on equity.