Which the discount rate to be used in discounting

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Problem 1: According to PAS 36, which of the following is an indication of impairment from internal sources of information?

a) Significant decline in the asset's (market) value.

b) Indications that the economic performance of an asset is, or will be, worse than expected.

c) Significant changes in technological, market, economic, or legal environment that adversely affect the recoverable amount of an asset.

d) The carrying amount of the entity's net assets exceeds its market capitalization.

Problem 2: According to PAS 36, when measuring an asset's value in use, the discount rate to be used in discounting the estimated cash flow should be the...

a) pre-tax rate that reflects current assessments of the time value of money and risks.

b) post-tax rate that reflects current assessments of the time value of money and risks.

c) pre-tax rate that reflects current assessments of market-based risks for similar replacement assets.

d) post-tax rate that reflects current assessments of market-based risks for similar replacement assets.

Reference no: EM132757020

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