An asset is impaired when the asset's carrying value is: Select one: A. Greater than the sum of discounted expected cash flows B. Less than the sum of discounted expected cash flows C. Less than the sum of undiscounted expected cash flows D. Greater than the sum of undiscounted expected cash flows E. None of the above

Question

Business

Summer Moran

8 October, 09:46

An asset is impaired when the asset's carrying value is: Select one: A. Greater than the sum of discounted expected cash flows B. Less than the sum of discounted expected cash flows C. Less than the sum of undiscounted expected cash flows D. Greater than the sum of undiscounted expected cash flows E. None of the above

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Vanessa Frey · Answer 1

D) Greater than the sum of undiscounted expected cash flows

Explanation:

An impaired asset is the asset of the company whose value is listed more in the company's balance sheet than the value in the market price. Long term assets are such form of asset. When the impaired asset is adjusted, the loss is placed under the income statement of the company.