The amount by which the carrying amount of an asset or a cash-generating unit exceeds its carrying amount is referred to as a/an:
A)depreciation expense.
B)amortisation cost.
C)impairment loss.
D)loss on disposal.

Question

Quizplus · Accepted Answer

The amount by which the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount is referred to as an impairment loss. Impairment loss occurs when the value of an asset declines and is not expected to recover in the future. Depreciation expense and amortization cost refer to the allocation of the cost of an asset over its useful life, while a loss on disposal occurs when an asset is sold for an amount less than its carrying amount.

The Amount by Which the Carrying Amount of an Asset