CERTYNEX IFRS ACADEMY

Mirabeau Ltd accounts for an owner-occupied building under the revaluation model, at a revalued amount of EUR 900,000. The direct costs of disposing of it would be significant (EUR 40,000). Management estimates the building's value in use at EUR 860,000. Which analysis is consistent with IAS 36?

The building is outside the scope of IAS 36, since it is already measured under the revaluation model.

The building cannot be impaired, since its revalued amount reflects its fair value at the revaluation date.

IAS 36 applies and the building is impaired, because the costs of disposal are not negligible and its value in use is below the revalued amount.

IAS 36 only applies if the costs of disposal exceed 10% of the revalued amount, which is not the case here.