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When can an entity use a PRIOR period's recoverable amount calculation as a proxy for the current annual test on an indefinite-life intangible?
AAlways — Ind AS 36 lets entities defer recalculation indefinitely
BNever — fresh recoverable amount calculation is always required
CIf (i) the asset/CGU composition hasn't changed significantly; AND (ii) prior recoverable amount exceeded carrying amount by a SUBSTANTIAL MARGIN; AND (iii) likelihood of current RA falling below CA is remote
DOnly for goodwill
Answer & Solution
Correct answer: C. If (i) the asset/CGU composition hasn't changed significantly; AND (ii) prior recoverable amount exceeded carrying amount by a SUBSTANTIAL MARGIN; AND (iii) likelihood of current RA falling below CA is remote
Three cumulative conditions in paragraph 24 permit reliance on prior calculation: stable composition + substantial historical headroom + remote likelihood of current impairment. Used as a practical expedient when conditions are clearly stable.
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