C is corrent. The requirement is to determine the conditions that must exist in order for an impairment loss to be recognized. An impairment loss should be recognized when the fair value of the asset is less than the carrying amount and the carrying amount of the long-lived asset is not recoverable. Condition II is stated correctly but Condition I is not. Therefore, this answer is correct.
A is incorrect because the fair value must be less than the carrying amount.
B is incorrect. An impairment loss should be recognized when the fair value of the asset is less than the carrying amount and the carrying amount of the long-lived asset is not recoverable. Condition II is stated correctly but Condition I is not.
D is incorrect. An impairment loss should be recognized when the fair value of the asset is less than the carrying amount and the carrying amount of the long-lived asset is not recoverable. Condition II is stated correctly but Condition I is not.
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