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Indications of impairment from EXTERNAL sources include all of the following EXCEPT:
AIncrease in market interest rates likely to materially affect the asset's value-in-use discount rate
BSignificant decline in market value beyond normal use/passage-of-time effects
CObsolescence or physical damage of the asset
DCarrying amount of net assets > market capitalisation of the entity
Answer & Solution
Correct answer: C. Obsolescence or physical damage of the asset
Obsolescence and physical damage are INTERNAL source indicators. The other three are external source indicators. Ind AS 36 paragraph 12 lists both categories separately.
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