An impairment loss occurs when:

Question

Quizplus · Accepted Answer

An impairment loss occurs when the carrying amount of an asset exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The recoverable amount is the amount that can be recovered through the use or sale of the asset. Therefore, option C is the correct answer. Options A and D are incorrect because they pertain to the residual value and initial cost of an asset, respectively. Option B is also incorrect because it states the opposite of the correct condition for an impairment loss.

An Impairment Loss Occurs When