CERTYNEX IFRS ACADEMY

For its printing division, whose losses are expected to continue, Kesmar set up a provision for future losses of 800,000 and performed no impairment test, considering the risk "already covered". Which analysis is correct?

Only the absence of a test is an error; the provision is justified.

Only the provision is an error; no test is needed.

The provision must be cancelled and the division's assets tested under IAS 36.

The provision should have been limited to the carrying amount of the division's assets.