A government experienced significant loss of certain roadways and bridges as a result of major flooding. Which of the following estimation approaches would be most useful in estimating the amount of asset impairment that has occurred?

Question

Quizplus · Accepted Answer

The restorative cost approach would be the most useful in estimating the amount of asset impairment that has occurred due to flooding. This approach estimates the cost of restoring the asset to its pre-loss condition, which is most relevant in this context. The deflated depreciated replacement cost approach and service units approach would not be as useful in this scenario.

A Government Experienced Significant Loss of Certain Roadways and Bridges