FAR 3.8 - Impairment

Question 1

For finite live intangible assets, if the carrying amount exceeds the total undiscounted future cash flows:

Answer 1

The asset is impaired

Question 2

How is the impairment loss calculated for finite live intangible assets?

Answer 2

Carrying amount - fair value = impairment loss

Question 3

For indefinite live assets, if the assets fair value is less than its carrying amount:

Answer 3

There is an impairment loss

Question 4

How is the impairment loss calculated for indefinite live intangible assets?

Answer 4

Carrying amount - fair value

Question 5

For fixed assets, if the sum of undiscounted expected future cash flows is less than the carrying amount:

Answer 5

An impairment loss needs to be recognized

Question 6

How is the impairment loss calculated for fixed assets?

Answer 6

Carrying value - fair value