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Forums › ACCA Forums › ACCA FR Financial Reporting Forums › IAS 36 Imparimanet of Assets Indicators
Hello.
There are two correct impairment indicators which are confusing me:
1.) ‘The carrying amount of the net assets of the entity is MORE than its market capitalisation’
2.) ‘Carrying amount of an entity’s net asset is LOWER than the entity’s number of share in issue multiplied by its share price’
I thought ‘entity’s no. of shares x its share price’ is market cap.
So then, I thought indicator #2 has to be HIGHER/MORE instead of lower in order to be true.
Would you please explain me thoroughly why those two are correct?
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