Which of the Following Statements Regarding International Accounting Standards for the Impairment

question 32

Multiple Choice

Which of the following statements regarding international accounting standards for the impairment of tangible assets is correct?

• A) Impairment losses cannot be subsequently reversed.
• B) Impairment losses can be subsequently reversed to the extent of the amount of the initial impairment loss.
• C) International accounting standards require a two-step test of impairment of a tangible asset.
• D) Accounting for impairments is not necessary since entities are required under international accounting standards to adjust the values of property,plant,and equipment to fair value at the end of each reporting period for which reports are prepared.

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Definitions:

Real Assets

Assets that have physical form or are tangible, such as real estate, commodities, or natural resources, as opposed to financial assets like stocks or bonds.

Wealth Distribution

The manner in which wealth is shared among individuals in a society, often analyzed for its levels of equality or inequality.

Coincidence of Wants

A situation in a barter economy where two parties each possess goods or services that the other wants, facilitating a direct exchange without the need for money.

Barter

The direct exchange of one good or service for another good or service.