A permanent decline in the ___________ of an asset is referred to as an impairment.Select answer from the options belowfair valueselling pricecarrying amountcost

AS 36 Impairment of Assets prescribes the procedures that should ensure that assets are included in a statement of financial position at no more than their recoverable amounts. Where an asset is carried at an amount in excess of its recoverable amount, it is said to be impaired and IAS 36 requires an impairment loss to be recognised. Required:(i) Define an impairment loss explaining the relevance of fair value less costs of disposal and value in use, and state how frequently assets should be tested for impairment. (5 marks)(ii) Explain how an impairment loss is accounted for. (4 marks)(b) Wilderness owns and operates an item of plant that cost $640,000 and had accumulated depreciation of $400,000 at 1 October 20X7. It is being depreciated at 12½% on cost. On 1 April 20X8 the plant was damaged when a factory vehicle collided into it. Due to the unavailability of replacement parts, it is not possible to repair the plant, but it still operates, albeit at a reduced capacity. Also it is expected that as a result of the damage the remaining life of the plant from the date of the damage will be only two years. Based on its reduced capacity, the estimated present value of the plant in use is $150,000. The plant has a current disposal value of $20,000 (which will be nil in two years’ time), but Wilderness has been offered a trade-in value of $180,000 against a replacement machine which has a cost of $1 million (there would be no disposal costs for the replaced plant). Wilderness is reluctant to replace the plant as it is worried about the long-term demand for the product produced by the plant. The trade-in value is only available if the plant is replaced. Required:Prepare extracts from the statement of financial position and statement of profit or loss of Wilderness in respect of the plant for the year ended 30 September 20X8. Your answer should explain how you arrived at your figures. (6 marks)

A decline in the price levels is called

An impairment loss occurs when: Reading required            Learning objective 8.3 on page 224Group of answer choicesthe recoverable amount of an asset exceeds the carrying amount.the asset has a residual value of zero.the recoverable amount of an asset exceeds its initial cost.the carrying amount of an asset exceeds the recoverable amount.

Which of the following statements regarding AASB 136 Impairment of Assets is MOST CORRECT?Group of answer choicesIts objective is to ensure assets are not carried at more than the amount recovered through use or sale of the asset.Impairment losses can never be reversed above the asset’s fair value.It allows financial statement preparers the choice of holding assets at recoverable amount instead of historical cost.Depreciation is calculated for an impaired asset based on its carrying amount as if no impairment loss was recorded.

_____ is a noncash expense that specifically recognizes that assets decline in value over time.Group of answer choicesAscensionDepreciationDividend payableNotes payable