An asset is impaired if
A) the present value of future cash flows is greater than the cost of the asset.
B) its carrying amount exceeds its recoverable amount.
C) its accumulated depreciation is greater than the cost of the asset.
D) its value is below market compared to the other assets in the cash generating unit.

Question

Quizplus · Accepted Answer

An asset is considered impaired when its carrying amount (book value) exceeds its recoverable amount, which is the higher of an asset's fair value less costs to sell and its value in use. This definition aligns with accounting standards such as IFRS and GAAP.

An Asset Is Impaired If