Which Statement Concerning AASB 136 'Impairment of Assets' Is Incorrect

question 15

Multiple Choice

Which statement concerning AASB 136 'Impairment of Assets' is incorrect?

• A) The upper limit on the carrying amount of an asset's 'recoverable amount' is to be applied irrespective of whether the cost model or the revaluation model is being used for the asset
• B) Recoverable amount is the net amount that is expected to be recovered through the use or sale of the asset
• C) The write down to recoverable amount must be recognised as an impairment loss in the income statement for the period
• D) A non-current asset must be written up to its recoverable amount when its recoverable amount is greater than its carrying amount

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Definitions:

Manufacturer

An entity or enterprise that makes goods through a process involving raw materials, components, or assemblies, usually on a large scale with machinery.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and net income or loss.

Period Costs

Expenses that are not directly tied to the production process and therefore are expensed in the period in which they incur, such as selling, general, and administrative expenses.