How is an impairment loss allocated to the non-current asset(s)?
A)Allocate the impairment loss in proportion to the gross amounts of the assets in the cash generating unit.
B)Allocate the impairment loss to assets with the highest carrying amounts in the cash generating unit.
C)Allocate the impairment loss in proportion to the net carrying amounts of the assets in the cash generating unit.
D)Allocate the impairment loss to assets with the lowest carrying amounts in the cash generating unit.

Question

Quizplus · Accepted Answer

The impairment loss should be allocated to the non-current asset(s) based on the proportion of each asset's net carrying amount in the cash generating unit. This ensures that the impairment loss is allocated based on the relative value of each asset and the impact of the impairment on each asset.

How Is an Impairment Loss Allocated to the Non-Current Asset(s)