According to IAS 36,a non-current asset should be:
A)revalued downwards where the net amount that is expected to be recovered through the cash inflows and outflows from its continued use and subsequent disposal exceeds its cost.
B)written down to its replacement cost when the recoverable amount is greater than its value in use.
C)written down to its recoverable amount when its carrying amount is greater than its recoverable amount.
D)revalued upwards where its value in use is greater than its net realisable value.

Question

Quizplus · Accepted Answer

According to IAS 36, a non-current asset should be written down to its recoverable amount when its carrying amount is greater than its recoverable amount. This is known as impairment and reflects a decrease in the asset's value due to a change in market conditions or the asset's condition. The recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use, which is the present value of expected future cash flows the asset will generate.

According to IAS 36,a Non-Current Asset Should Be