IAS 36 - IMPAIRMENT OF ASSETS - GROUP 3

Question 1. Which of the following assets is not covered by the impairment regulation of IAS 36?

• A. Intangible assets

• B. Property, plant and equipment

• C. Goodwill

• D. Inventory

Question 2. Which of the following is NOT an indicator of impairment?

• A. Advances in the technological environment in which an asset is employed have an adverse impact on its future use

• B. An increase in interest rates which increases the discount rate an entity uses

• C. The carrying amount of an entity’s net assets is higher than the entity’s number of shares in issue multiplied by its share price

• D. The estimated net realizable value of inventory has been reduced due to fire damage although this value is greater than its carrying amount

Question 3. Which of the following asset is tested for impairment annually

• A. Inventory

• B. Goodwill

• C. Deferred tax asset

• D. Property, plant, equipment

Question 4. Currently, the recognition and recording of long-term assets in the financial statements of Vietnamese enterprises is done according to which principle?

• A. Accrual principle.

• B. Going concern principle

• C. Historical cost.

• D. Matching principle.

Question 5.  How to recognize an asset if salvage value < book value?

• A. Recording loss due to impairment asset

• B. Recording profit due to impairment asset

• C.  No impairment of assets

Question 6. If the fair value less costs to sell cannot be determined then:

• A. The recoverable amount is the value in use

• B. The carrying value of the asset is used

• C. The replacement cost is used

• D. The asset is not impaired

Question 7. When deciding upon the discount rate to be used, which factors should not be taken into account?

• A. Risks specific to the asset which future cash flow estimates have not been adjusted

• B. Corporate lending rates

• C. Risks which relate to the asset for which future cash flow estimates have been adjusted

• D. Cost of capital

Question 8. If an entity has cash-generating units of different size , each containing goodwill, it is necessary that each unit must be tested for goodwill:

• A. at the same time

• B. annually at balance date

• C. and the smaller unit must be tested before the larger unit

• D. only if it is reasonable to expect than goodwill has been impaired

Question 9. How many steps to allocate an impairment loss?

• A. 1

• B. 2

• C. 3

Question 10. Choose the wrong sentence. IAS 36 standard does not apply to:

•  A. Agricultural-related biological assets

• B. The right to exploit production and non-renewable resources.

• C. Limited assets held for sale

• D. Land, Building, Machinery