CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

The amount of the loss required to be recognized for an impairment in the value of a long-lived asset should be the excess of the asset's carrying value over the ______.

A. undiscounted estimated future cash flows
B. acquisition cost
C. fair value
D. acquisition cost less the estimated future cash flows
Correct Answer: C

When the fair value is available, the loss on impairment is the difference between the carrying value and the fair value.

User Contributed Comments 5

User Comment
mrushdi if fair value not available, then discount value of cash flows.
Renaud1807 discounted value of CF!!
Vibis tricky
johntan1979 Answer A is used in recoverability test to determine impairment, not to calculate the loss.
quanttrader fair value if known, otherwise discounted cash flows
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