The amount of impairment loss is the excess of book value over:
A) Amortized cost.
B) Undiscounted future cash flows.
C) Fair value.
D) Future revenues.

Question

Quizplus · Accepted Answer

The amount of impairment loss is the excess of book value over the fair value of the asset. This is because impairment is recognized when the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is either the fair value of the asset or the value in use, which is the present value of estimated future cash flows. However, since the question only gives the option of future cash flows, which is not discounted, it cannot be the correct answer.

The Amount of Impairment Loss Is the Excess of Book