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      Question

      Which of the following best differentiates impairment

      from depreciation?
      A Impairment is systematic; depreciation is sudden Correct Answer Incorrect Answer
      B Depreciation is optional; impairment is mandatory Correct Answer Incorrect Answer
      C Impairment reflects unexpected loss; depreciation is expected allocation Correct Answer Incorrect Answer
      D Both are calculated the same way Correct Answer Incorrect Answer
      E Depreciation is based on market value Correct Answer Incorrect Answer

      Solution

      Depreciation is a systematic allocation of asset’s cost, while impairment represents a sudden or unexpected loss in asset value, usually tested under Ind AS 36

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