An impairment loss will be recognised in the group accounts when non current assets are sold at a loss on an intra-group basis when:
A) value in use is greater than carrying amount
B) value in use is less than carrying amount
C) value in use is greater than sale price
D) value in use is less than sale price

Question

Quizplus · Accepted Answer

An impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount, which is either its fair value less costs to sell or its value in use. If value in use is less than carrying amount, it means the asset is not generating enough cash inflow to cover its carrying amount, and therefore, impairment loss should be recognised.

An Impairment Loss Will Be Recognised in the Group Accounts