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The rational entity model in comparison to the cost recovery model provides less timely information. provides...

The rational entity model in comparison to the cost recovery model

provides less timely information.
provides less representational faithfulness.
is more neutral.
is less relevant.
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Answer #1

Ans is (c) The rational entity model in comparison to the cost recovery model is more neutral.

The Rational Entity Impairment Model better reflects the economic conditions underlying the asset’s usefulness to the entity, by considering the asset’s value in use (a discounted value) as well as its fair value less costs to sell, and by capturing both the declines and recoveries in value of the asset. Therefore, the Rational Entity Impairment Model is preferred.

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