CERTYNEX IFRS ACADEMY

Talmont measures its equipment at cost. An assembly line with a carrying amount of 210,000 has a recoverable amount of 168,000. To protect the year's profit, the finance director proposes charging the loss of 42,000 to reserves. What should you answer?

The proposal is acceptable: the loss on an asset measured at cost may be charged to available reserves

The loss of 42,000 must be recognised in other comprehensive income, with no effect on net profit

The loss of 42,000 must be recognised immediately in profit or loss

The loss of 42,000 must be spread over the remaining useful life through additional depreciation