Question

Estimates of future CFs exclude IAS 36.

A) Intangible Assets
B) Impairment of Assets
C) Income Taxes
D) Investments in Associates

Answer 1

IAS 36 deals with the Impairment of Assets, and when estimating future cash flows for financial reporting, the effects of asset impairment as guided by
`IAS 36` are typically excluded. The correct answer to which IAS estimates of future cash flows should exclude is B) Impairment of Assets.

Step-by-step explanation:

The question you're asking relates to the estimation of future cash flows (CFs) under various International Accounting Standards (IAS). When we talk about estimates of future CFs exclude
`IAS 36`, we are referring to the fact that these estimates do not take into account the guidance provided by
`IAS 36`, which is related to the Impairment of Assets. This standard ensures that assets are not carried at more than their recoverable amount, and it requires entities to assess at each reporting date whether there is any indication that an asset may be impaired. If any such indication exists, the entity must estimate the recoverable amount of the asset.

In the options provided, B) Impairment of Assets is the correct answer, as is the
`IAS 36` standard that deals with impairment. Therefore, estimates of future cash flows would exclude considerations that are specific to the impairment of assets as stated in
`IAS 36`. This is important in the context of accounting and financial reporting, as it affects how assets and their valuation are treated in the financial statements.