AASB 116 requires that where the replacement cost of a non-current asset is less than its carrying value,the asset should be written down to its replacement cost.

Question

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AASB 116 does not specifically require that a non-current asset be written down to its replacement cost if the replacement cost is less than its carrying value. Instead, it requires assets to be carried at cost less any accumulated depreciation and any accumulated impairment losses. Impairment losses are recognized if the carrying amount of an asset exceeds its recoverable amount, not specifically its replacement cost.

AASB 116 Requires That Where the Replacement Cost of a Non-Current