A loss on impairment of an intangible asset is the difference between the asset's
A) carrying amount and the expected future net cash flows.
B) carrying amount and its recoverable amount.
C) recoverable amount and the expected future net cash flows.
D) book value and its fair value.

Question

Quizplus · Accepted Answer

The loss on impairment of an intangible asset is the difference between its carrying amount and its recoverable amount. The recoverable amount is the higher of the asset's fair value less cost to sell and its value in use (i.e. expected future net cash flows). Therefore, options A and C are incorrect. Option D is not accurate as the book value is the same as the carrying amount.

A Loss on Impairment of an Intangible Asset Is the Difference