Reference no: EM132895924

Question 1: A property's recoverable amount is equal to its

A. Fair value less cost to sell

B. Value in use

C. A or B, whichever is higher

D. A or B, whichever is lower

Question 2: When there is no evidence of the market value of the asset because of its specialized nature, the estimate of the fair value shall be:

A. Gross replacement cost

B. Depreciated replacement cost

C. Net recoverable value

D. Value in use

Question 3: S1: After recognition, an entity may choose either the Cost Model or the Revaluation Model to be applied in an entire class of PPE. S2: Using the Cost model shall not result to any impairment loss since impairment happens only when an asset is revalued.

A. both true

B. both false

C. S1 is true

D. S2 is true

Question 4: Which is not an indication of possible asset impairment?

A. Significant decrease or decline in market value of the asset

B. Evidence of obsolescence or physical damage of an asset

C. Evidence that the economic performance of an asset will be worse than expected

D. Use of accelerated method for depreciation of the asset

E. None of the above

Question 5: Which is not relevant in determining the useful life of an intangible asset?

A. Obsolescence

B. Expected usage of the asset

C. Expected action of competitor

D. Residual value of the asset