CERTYNEX IFRS ACADEMY

An engineering company wants to know whether its structural calculation software, amortised under the cost model, is impaired. Which approach does it follow?

It applies a test specific to IAS 38 comparing the software's original cost with its fair value at the year-end.

It applies IAS 36 and compares the software's carrying amount with its recoverable amount.

It compares the carrying amount with original cost and writes down the difference, which reflects wear of the software.

It compares the charge for the year with the revenue generated by the projects using the software.