Reference no: EM132898705

Problem 1: Under the impairment of assets, value-in-use is

A. The higher of an asset's fair value less cost to sell and its market value

B. The discounted present value of future cash flows arising from the continuing use of the asset and from its disposal.

C. The amount at which the asset is recognized in the statement of financial position

D. The undiscounted present value of future cash flows arising from the continuing use of the asset and from its disposal.

Problem 2: Which of the statements is incorrect concerning the depreciation methods?

A. Under the output method, the cost per unit of production is constant.

B. The straight-line method is particularly appropriate where the asset is expected to decline in usefulness as a function of time and the expected use pattern of the asset is fairly constant over time.

C. The sum of the years' digits method provides for a decreasing depreciation charge.

D. First-year depreciation under the double declining balance method is computed as the depreciable amount multiplied by double the straight line rate.

E. None of the choices is incorrect