Property, Plant and Equipment

Question 1

Carrying Amount

Answer 1

The amount at which an asset is recognized after deducting any accumulated depreciation and accumulated impairment loss.

Question 2

Fair Value

Answer 2

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Question 3

Impairment Loss

Answer 3

When Carrying amount > Recoverable amount

Question 4

Recoverable Amount

Answer 4

The higher of an asset’s fair value less costs of disposal and its value in use.

Question 5

Cost

Answer 5

The amount of cash or cash equivalents paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition or construction or, where applicable, the amount attributed to that asset when initially recognized.

Question 6

When to do impairment test

Answer 6

• Physical damage to an asset
• Significant decline in the market value of an asset
• Lower than expected economic performance of a segment
• Significant changes in the technological, economic or legal environment
• Significant increase in the interest rates used in discounting assets’ value in use.