AASB 136 Requires That Assets Are Carried at No More

question 33

Essay

AASB 136 requires that assets are carried at no more than their recoverable amount.Outline the accounting treatment required to recognise an impairment loss.In your answer discuss the subsequent reversal of an impairment loss.

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Definitions:

Annual Overhead Costs

The total expenses not directly tied to a product or service's production, incurred over a year, such as rent, utilities, and insurance.

Activity Base

A measure used in cost accounting to assign costs to various activities, often driving the allocation of overhead.

Overhead Application

The process of allocating indirect costs to specific cost objects, such as products or departments.