When computing an impairment loss for a tangible asset,the market price shall be the fair value unless no active market exists for the asset.

Question

Quizplus · Accepted Answer

According to International Accounting Standard (IAS) 36, the recoverable amount of a tangible asset (which determines whether an impairment loss is necessary) is the higher of the asset's fair value less costs to sell and its value in use. If an active market exists for the asset, the fair value should be used as the market price. However, if no active market exists, other valuation techniques may need to be applied to determine the fair value.

When Computing an Impairment Loss for a Tangible Asset,the Market