How roman should recognize a loss on impairment of

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Problem 1: All of the following are true of the recoverable amount used in the impairment test of a long-lived asset except:

a. An asset's recoverable amount is the lower of its value-in-use and its fair value less cost to sell.

b. An asset's recoverable amount is the higher of its fair value less cost to sell and its value-in-use.

c. The recoverable amount is calculated as the asset's value in use less costs to sell.

d. If an asset's recoverable amount is higher than the carrying amount, no impairment loss will be reported on the period's income statement.

Problem 2: Roman Corporation owns machinery with a book value of P3,800,000. The machinery has a fair value less costs to sell of P3,500,000, and its value-in-use is P3,400,000. Roman should recognize a loss on impairment of

a. P0

b. P300,000

c. P100,000

d. P400,000

Reference no: EM132961108

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