ACCA Financial Reporting (F7) Practice Exam 2025 - Free Financial Reporting Practice Questions and Study Guide

The correct choice identifies significant technological advancements as not being a factor indicating asset impairment. Asset impairment refers to a situation where the carrying amount of an asset exceeds its recoverable amount, generally due to a decline in the asset's value.

When considering the other factors, an increase in interest rates can lead to higher discount rates, thereby affecting the present value of future cash flows related to that asset and possibly indicating impairment. Adverse changes in the economic environment can impact the overall market and specific sectors, suggesting that an asset may not generate the expected cash flows or may be less valuable. Similarly, significant declines in market value directly reflect a reduction in the worth of an asset, indicating potential impairment.

Conversely, significant technological advancements can often indicate the opposite scenario, where assets may actually increase in value due to enhanced capabilities or efficiencies. Therefore, the presence of new technologies typically does not suggest impairment but may instead enhance the asset's usefulness or marketability.