IAS 36 Determine if and when to test for impairment

IAS 36 Determine if and when to test for impairment – When looking at the step-by-step IAS 36 impairment approach it comes down to the following broadly organised steps:

  • What?? – Determining the scope and structure of the impairment review (see the step-by-step IAS 36 impairment approach),
  • If and when? – Determining if and when a quantitative impairment test is necessary (discussed on this page),
  • How? – Understanding the mechanics of the impairment test and how to recognise or reverse any impairment loss, if necessary (see IAS 36 Impairment test – How?).

Step 3: IAS 36 Determine if and when to test for impairment

IAS 36 requires an entity to a perform a quantified … Read more

Retrospective or prospective application

Retrospective or prospective application

Retrospective or prospective application

 

Retrospective application – Applying a new accounting policy to transactions, other events, and conditions as if that policy had always been applied (change in accounting policy) (IAS 8 5).

OR

Correcting the recognition, measurement and disclosure of amounts of elements of financial statements as if a prior period error had never occurred.

Prospective application of a change in accounting policy and of recognising the effect of a change in an accounting estimate, respectively, are:

  1. Applying the new accounting policy to transactions, other events and conditions occurring after the date as at which the policy is changed; and
  2. Recognising the effect of the change in the accounting estimate in the
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