The fair value loss impairment model
A) is used for all investments that are not accounted for as FV-NI.
B) requires a separate impairment test.
C) calculates the impairment loss as the difference between the asset's fair value and its current carrying amount.
D) calculates the impairment loss as the difference between the asset's original cost and its current carrying amount.

Question

Quizplus · Accepted Answer

The fair value loss impairment model requires an impairment test and calculates the impairment loss as the difference between the asset's fair value and its current carrying amount. This model is used for investments that are not accounted for as FV-NI. Therefore, option A is incorrect. Option D is incorrect because it refers to the historical cost model, which is a different method for measuring investments.

The Fair Value Loss Impairment Model