Question

Which of the following best differentiates impairment

Q: Answer-Which of the following best differentiates impairment from depreciation?

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

from depreciation?

A Impairment is systematic; depreciation is sudden

B Depreciation is optional; impairment is mandatory

C Impairment reflects unexpected loss; depreciation is expected allocation

D Both are calculated the same way

E Depreciation is based on market value

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Which of the following best differentiates impairment

Solution