A recoverability test is necessary to determine if an asset is impaired.

Name: A recoverability test is necessary to determine if an asset is impaired.
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Quizplus · Accepted Answer

A recoverability test is necessary to determine if an asset is impaired as it helps in evaluating if the asset's carrying value is higher than its recoverable amount. If the carrying value exceeds the asset's recoverable amount, then the asset is considered impaired, and the carrying value needs to be adjusted accordingly.

A Recoverability Test Is Necessary to Determine If an Asset