Advanced AccountingMCQICAI Practice / AS 28 Impairment of AssetsQuestion 12314 of 300
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As at 31st March 2024, the carrying amount of a production plant of Siddhi Chemicals Ltd. is ₹15,000,000. Its net selling price (fair value less costs to sell) is estimated at ₹12,500,000 and value in use is estimated at ₹12,800,000. Under AS 28, what is the impairment loss to be recognized in the Profit & Loss Account?

Select Your Answer (Keyboard: A, B, C, D)
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Correct Answer

✅ Option C — ₹2,200,000

All Options:

  • A₹1,800,000
  • B₹3,200,000
  • C₹2,200,000 ✓
  • D₹2,700,000

Detailed Solution & Explanation

Correct Answer: Option **C** (₹2,200,000) **Statutory Provision & Working Steps (AS 28 Impairment of Assets):** Recoverable Amount is higher of Net Selling Price (₹12,500,000) and Value in Use (₹12,800,000) = ₹12,800,000. Impairment Loss = Carrying Amount (₹15,000,000) - Recoverable Amount = ₹2,200,000. Hence, the correct answer is Option C.

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