alleryStart learning →In the recoverability test, an asset is impaired if expected cash flows are?
AMore than carrying amount
BEqual to carrying amount
CLess than carrying amount
DExactly zero always
Answer & Solution
Correct answer: C. Less than carrying amount
If the sum of expected cash flows is below the carrying amount, the asset is considered impaired.
Keep practising Depreciation and Amortisation
Browse all Depreciation and Amortisation questions for CA Foundation, or explore more Accounting topics.
Related questions
How does depreciation expense affect the reported net income?Depletion is most used in which group of industries?Depletion is the using up of natural resources by which activity?Cost depletion allocates the cost of a resource in proportion to what?Pooling of similar assets bought in one year helps tax systems to?Buildings are generally given what depreciable lives under tax systems?For tax depreciation, bare land generally receives?A tax system that allows a fixed percentage of cost each year is called?