In allocating an impairment loss,an entity shall not reduce the carrying amount of an asset below the highest of:
A)value in use and zero
B)present value and value in use
C)cost and market value
D)initial cost and fair value.

Question

Quizplus · Accepted Answer

According to IAS 36, in allocating an impairment loss, an entity shall not reduce the carrying amount of an asset below its value in use or zero, whichever is higher. This means that if the asset has no value in use, its carrying amount cannot be reduced below zero. The other options (B, C, D) are not relevant as they are not specified in the standard.

In Allocating an Impairment Loss,an Entity Shall Not Reduce the Carrying