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:

Guarantee Indebtedness

A commitment by one party to answer for the financial liabilities or obligations of another party, ensuring the debt will be paid.

Breach of Contract

Violation of any terms or conditions in a contract without a lawful excuse, which may result in legal action.

Adequacy of Consideration

A legal principle assessing whether what is exchanged in a contract (goods, services, or money) is fair and of sufficient value.

Mistake as to Existence

A legal misunderstanding or error regarding the actual existence of a subject matter or condition of a contract.