alleryStart learning →Impairment is charged to expenses when
ABook value exceeds recoverable amount
BFair value exceeds book value
CDepreciation for the year is nil
DThe asset is fully insured
Answer & Solution
Correct answer: A. Book value exceeds recoverable amount
An asset whose book value is above what can be recovered from it is impaired.
Keep practising Property, Plant and Equipment
Browse all Property, Plant and Equipment questions for CA Inter, or explore more Accounting topics.
Related questions
Depletion applies to which type of asset?If book and tax depreciation rates differ for a company, what does this create?Depreciation methods that charge more in early years are described as what?Which method is described as the simplest and most often used depreciation method?Yearly depreciation is debited to expense and credited toNet book value of an asset is the historical cost less what?Machine cost Rs 1,20,000, expected sale Rs 15,000, disposal cost Rs 5,000. Residual value?How is a capital expenditure recorded in the books?