Recoverable amount of an asset is defined in AASB 136 the higher of its fair value less costs to sell and its value in use.In the case where an asset's carrying amount is less than its recoverable amount,which action is consistent with AASB 136?
A) Recognise difference as increase is asset revaluation reserve.
B) Recognise difference as impairment loss.
C) Recognise difference as gain from reinstatement of asset.
D) Leave asset at its carrying amount.
E) None of the given answers.

Question

Quizplus · Accepted Answer

According to AASB 136, if an asset's carrying amount is less than its recoverable amount, the difference should be recognized as an impairment loss. This ensures that the asset is stated at no more than its recoverable amount.

Recoverable Amount of an Asset Is Defined in AASB 136