Reference no: EM133002424

Problem 1: Impairment loss for asset to be held and used shall be reported?

a) As a component of income from continuing operations.

b) As a component of discontinued operations.

c) As an extraordinary item.

d) As a change in accounting estimate.

Problem 2: Which statement is incorrect concerning the reversal of an impairment loss?

a) The increased carrying amount due to reversal should not be more than what the depreciated historical cost would have been if the impairment had not been recognized.

b) Reversal of an impairment loss is recognized as income in the income statement.

c) Adjust depreciation for future periods.

d) Reversal of an impairment loss for goodwill is recognized as income in the income statement.

Problem 3: In 2021, Impostor Limited estimated that the carrying amount of goodwill was impaired and wrote it down by P50,000. In a subsequent year, the company reassessed goodwill was decided that the old acquired goodwill still existed. The appropriate accounting treatment in the subsequent period is:

a) Increase goodwill by an adjustment to retained earnings.

b) Ignore the reversal as it is prohibited by IAS 36 Impairment of Assets.

c) Reverse the previous goodwill impairment loss.

d) Recognize the revalued amount of goodwill by an adjustment against the asset revaluation surplus account.