Asked by
Trish Paradis
on Nov 08, 2024
Verified
If an asset has a carrying value of $1,000 and its recoverable amount is $750, then a $250 impairment loss has been incurred.
Carrying Value
The book value of assets and liabilities as represented on the balance sheet, considering factors like depreciation or amortization.
Recoverable Amount
The recoverable amount is the greater value between an asset's net selling price and its value in use, indicating the potential value that can be recovered from an asset over time.
Impairment Loss
A reduction in the recoverable amount of a fixed asset or goodwill below its book value, recognized as an expense in the income statement.
- Acquire an understanding of the notion of impairment loss and its computation process.
Verified Answer
MM
Learning Objectives
- Acquire an understanding of the notion of impairment loss and its computation process.