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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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