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:

Consolidated Expenses

Consolidated expenses refer to the aggregation of all expenses from every division or subsidiary of a corporation into a single expenses figure.

Common Stock

Shares of ownership in a corporation that entitle holders to vote on corporate matters and receive dividends.

Acquisition

The process of obtaining control of another company or business, either through direct purchase, merger, or all-stock transaction.

Fair Values

The approximate value for which a security or debt could be traded between informed, consenting parties in a fair deal.