In measuring an impairment loss for a financial asset under U.S. GAAP and under IFRS, the carrying value of the financial asset

Question

Arte-miy333 [17]

3 years ago

10

In measuring an impairment loss for a financial asset under U.S. GAAP and under IFRS, the carrying value of the financial asset

would be compared to:

Business

1 answer:

Vitek1552 [10] · Answer 1 · 2022-06-05T11:29:33+03:00

In measuring an impairment loss for a financial asset under U.S. GAAP and under IFRS, the carrying value of the financial asset would be compared to:

under U.S. GAAP Fair value and under IFRS recoverable amount.

Explanation:

In US GAAP, the cost of financial asset depreciation is calculated as the difference between carried value and fair value; in compliance with IFRS, a loss of financial asset impairment is defined as the difference between carrying value and the percentage of the asset that can be recouped.

In compliance with US-based ASC 360-10-35-20. The recovery of a historically identified impairment loss (or "restoration") is forbidden because an item is deemed to have a new cost base after an impairment loss has been registered.