A "bottom up" test and "top down" test must be applied under IASB standards to determine what?
A)impairment of tangible fixed assets
B)impairment of intangible fixed assets
C)impairment of goodwill
D)allocation of overhead costs

Question

Quizplus · Accepted Answer

A "bottom up" test and "top down" test are applied under IASB standards to determine impairment of goodwill. The purpose of these tests is to verify if the carrying amount of goodwill is recoverable or if it needs to be impaired. Option A is incorrect because impairment of tangible fixed assets is determined based on the asset's recoverable amount, not through "bottom up" and "top down" tests. Option B is incorrect because impairment of intangible fixed assets is determined based on the asset's recoverable amount, not through "bottom up" and "top down" tests. Option D is incorrect because allocation of overhead costs is not related to impairment testing.

A "Bottom Up" Test and "Top Down" Test Must Be