Asset impairment is not a consideration under which framework?

Asset impairment is not a consideration under which framework?

• A. ITB
• B. GAAP
• C. IFRS
• D. PAS 36

Answer: (A)

Asset impairment is a financial reporting issue that triggers when an asset’s carrying amount may not be recoverable. The standards require testing for impairment and recognizing a loss if the recoverable amount is lower than the asset’s carrying value. Under IFRS, impairment is governed by PAS 36, which defines recoverable amount as the higher of fair value less costs of disposal and value in use and provides the steps to recognize and measure impairment. Under US GAAP, impairment is addressed within its own framework with similar principles, focusing on recoverability and measurement of impairment losses. An Invitation to Bid (ITB) is a procurement document used to solicit bids for a project. It is not a financial reporting framework and does not prescribe rules for recognizing or measuring asset impairment. Therefore asset impairment is not a consideration under this framework.

Asset impairment is a financial reporting issue that triggers when an asset’s carrying amount may not be recoverable. The standards require testing for impairment and recognizing a loss if the recoverable amount is lower than the asset’s carrying value. Under IFRS, impairment is governed by PAS 36, which defines recoverable amount as the higher of fair value less costs of disposal and value in use and provides the steps to recognize and measure impairment. Under US GAAP, impairment is addressed within its own framework with similar principles, focusing on recoverability and measurement of impairment losses.

An Invitation to Bid (ITB) is a procurement document used to solicit bids for a project. It is not a financial reporting framework and does not prescribe rules for recognizing or measuring asset impairment. Therefore asset impairment is not a consideration under this framework.