When Evaluating Whether an Asset Has Been Impaired, the Carrying

question 14

Multiple Choice

When evaluating whether an asset has been impaired, the carrying amount of the asset must be compared to recoverable amount. Recoverable amount is the higher of:

• A) initial cost: and, fair value;
• B) fair value less costs to sell: and, value in use;
• C) original cost: and, net present value;
• D) value in use: and, original cost.

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Definitions:

Per Se Rule

A legal doctrine declaring that certain actions are inherently illegal and do not require detailed proof of harm or anti-competitive effect to establish their illegality.

Monopoly Power

Monopoly power refers to the ability of a single company or entity to control a significant portion of the market for a particular good or service, limiting competition and potentially influencing prices or terms of sale.

Market Shares

Market Shares represent the percentage of an industry's total sales that is earned by a particular company over a specified time frame.

Inference

The process of drawing conclusions from facts or evidence.