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Stephen Widberg.
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aarti2407
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dear tutor,
is increase in operating costs for any reason, an indicator of impairment, if so can you explain why?
Stephen Widberg
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Costs up = profit down = impairment indicator
But as always it’s a judgement call
aarti2407
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so you mean sir a CGU/assets value in us will fall?
but even if i assume that value in use will fall, its not necessary that FV will fall too. And if FV is above carrying amount, then even if Value in use goes down, it won’t impair the asset.
Stephen Widberg
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Impairment indicator means that you should do impairment review.
It does not follow that RA will be less than CA – it depends on the forecasts
aarti2407
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