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A. It reduces investing cash flow in the year loss is reported.
B. It reduces the net income and carrying amount of assets.
C. It is considered a non-cash item and thus does not affect the cash flowstatement.
C is the least likely statement representing the treatment of Impairment loss.
least likely is option c 'It is considered a non-cash item and thus does not affect the cash flowstatement" directly
B. It reduces the net income and carrying amount of assets.
B. It reduces the net income and carrying amount of assets.
Impairment loss is an expense hence reducing the net income when charged in the profit and loss account on the other hand the asset for which its review of impairment test has resulted in the loss will need to be reported in the new value ascertained hence reducing the carrying value of the asset.
A-----------------------------------------------
It is considered a non-cash item and thus does not affect the cash flowstatement.
