Recoverable amount is the higher of the following:
A)fair value and value in use
B)fair value and carrying value
C)fair value less costs to sell and value in use
D)value in use and carrying value

Question

Quizplus · Accepted Answer

Recoverable amount is the higher of fair value less costs to sell and value in use, as per IAS 36 Impairment of Assets. This means that in determining the recoverable amount of an asset, an entity needs to consider both the amount that could be obtained from selling the asset less any costs of disposal (i.e., fair value less costs to sell), as well as the cash flows expected to be generated by the asset over its remaining useful life (i.e., value in use). The carrying value (i.e., the asset's book value) and fair value alone are not sufficient to determine the recoverable amount.

Recoverable Amount Is the Higher of the Following