If the recoverable amount of a cash-generating unit exceeds its carrying amount:
A)the carrying amount must be increased to the recoverable amount.
B)there is no impairment loss.
C)the carrying amount must be decreased to the fair value.
D)there is an impairment loss.

Question

Quizplus · Accepted Answer

If the recoverable amount of a cash-generating unit exceeds its carrying amount, there is no impairment loss. This is because the carrying amount is already lower than the recoverable amount, indicating that the asset is not impaired. Therefore, no adjustment to the carrying amount is necessary.

If the Recoverable Amount of a Cash-Generating Unit Exceeds Its