The Impairment Test Must Be Applied to Tangible Assets

question 4

Multiple Choice

The impairment test must be applied to tangible assets:

• A) at each balance date;
• B) every three years;
• C) at each reporting date including interim reporting dates such as half-year;
• D) only if there is an indication that the asset may be impaired.

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Definitions:

Industry Standard

Established norms, specifications, or criteria within a particular industry, serving as a benchmark for quality and compliance.

Expected Cash Flows

The projected cash receipts and payments a business expects over a certain period, considering various scenarios.

Abandonment Option

In project management and investment, the option to cease further investment or project development if returns do not meet a certain threshold.

Put Option

A financial contract giving the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a specified price within a specified time.