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P2-D2.
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johnbriane
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Dear Sir,
can you please explain how are below two statements related to internal indicators of impairment?
1. “Evidence of obsolescence of one or more assets”
2. “A decline in the economic performance of one or more assets”
P2-D2
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Hi,
If an asset is showing signs of obsolescence then it is likely because there is a better version of the asset available and so the current asset being used will be worth less as the newer asset is more desirable.
If the asset is not performing well (e.g. not as efficient in producing the goods it is meant to produce) then it is not operating at its full economic worth and could potentially be worth less.
Thanks
johnbriane
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