Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN: 9781337619455
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: Cengage Learning
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Which of the following is not a part of the impairment test of equipment under IFRS?
Group of answer choices
determine the asset's fair value less costs to dispose
determine the fair value of the cash-generating unit without the asset
determine the asset's carrying value
determine the discounted value of the future cash flows expected to be derived from the asset
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- A loss on impairment on a limited life intangible asset is the difference between the asset’s Select one: carrying value and its undiscounted expected future net cash flows. fair value and its net realizable value. fair value and its discounted expected future net cash flows. carrying value and its fair value.arrow_forwardWhich of the following is not a part of the impairment test of equipment under IFRS? Group of answer choices determine the fair value of the cash-generating unit without the asset determine the discounted value of the future cash flows expected to be derived from the asset determine the asset's fair value less costs to dispose determine the asset's carrying valuearrow_forward19. Which of the following is an appropriate cost approach for determining fair value a. Using relevant information from recent transactions. b. Using present value techniques to discount cash flows. measurements? c. Using the current replacement cost of the asset. d. Using the undiscounted cash flows from the asset. 20. Which of the following concerning inputs used in determination of fair value is/are correct? 1. Only observable inputs can be used. II. Inputs that incorporate the entity's assumptions may be used. a. I only. b. Il only. c. Both I and II. d. Neither I nor II **Please provide all computations and explanations. Thank you!!arrow_forward
- Which of the following statements is true about assessing recoverability of property, plant and equipment? Group of answer choices If the sum of the undiscounted future cash flows exceeds the carrying value of the asset, then the asset is not impaired. If the sum of the undiscounted future cash flows exceeds the carrying value of the asset, then the asset is impaired. If the sum of the discounted future cash flows exceeds the carrying value of the asset, then the asset is not impaired. If the sum of the discounted future cash flows exceeds the carrying value of the asset, then the asset is impaired.arrow_forwardWhich one of the following terms best describes the amount of cash or cash equivalents that could currently be obtained by selling an asset in an orderly disposal? Fair value Residual value Realizable value Value in usearrow_forwardIn a replacement analysis, the market value of the currently owned asset a. does not impact the cash flows of the replacement asset(s) in the opportunity cost approach b. does not impact the cash flows of the current asset in the cash flow approach if the current asset is kept c. is treated as a salvage value for the current asset in the cash flow approach if the current asset is kept d. is added to the first cost of the replacement asset(s) in the opportunity cost approach.arrow_forward
- What is the nature of the recoverability test for indefinite-life intangible assets? Group of answer choices There is no recoverability test for indefinite-life intangible assets. Is the carrying value of the asset greater than the sum of future discounted cash flows generated by the asset? Is the carrying value of the asset greater than the fair value of the asset? Is the carrying value of the asset greater than the sum of undiscounted future cash flows generated by the asset?arrow_forwardWhich of the following situations indicates that an asset is impaired?a. The net book value of the asset is less than the asset’s estimated future cash flows.b. The net book value of the asset is more than the asset’s estimated future cash flows.c. The fair market value of the asset is less than the asset’s net book value.d. The fair market value of the asset is more than the asset’s net book value.arrow_forwardIndicate whether the following statement is true or false: The recoverable amount for each class of asset is compared to the carrying amount for each class of asset unless that class of asset forms part of a cash-generating unit, in which case the recoverable amount for that cash-generating unit is compared to the carrying amount for that cash-generating unit. Please don't give plagiarised answer thankuarrow_forward
- Indicate whether each of the following statements is true or false. An impairment loss is the amount by which the carrying amount of the asset exceeds the sum of the expected future cash flows from the use of that asset. Answer The economic performance of an asset being worse than expected can be viewed as an external indicator of impairment of asset values for property, plant and equipment. Answer Under IFRS, an impairment loss can be reversed when estimates change.arrow_forwardWhat is the purpose of amortisation? To allocate the cost of an intangible non-current asset over its useful life To ensure that funds are available for the eventual purchase of a replacement non-current asset To reduce the cost of an intangible non-current asset in the statement of financial position to its estimated market value To account for the risk associated with intangible assetsarrow_forwardWhich of the following is not a difference between U.S. GAAP and IFRS treatment of impaired assets? Multiple Choice The use of discounted cash flow. Due to differences, U.S. GAAP may trigger an impairment loss that would not be triggered by IFRS. The right to reverse prior impairment losses when there is a change in the estimates used to measure the loss. In determining the valuation, costs to sell are deducted from fair value.arrow_forward
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