IAS 36 How Impairment test

IAS 36 How Impairment test is all about this – When looking at the step-by-step IAS 36 impairment approach it comes down to the following broadly organised steps: IAS 36 How Impairment test

  • What?? – Determining the scope and structure of the impairment review, explained here,
  • If and when? – Determining if and when a quantitative impairment test is necessary, explained here,
  • IAS 36 How Impairment test or understanding the mechanics of the impairment test and how to recognise or reverse any impairment loss, if necessary. Which is explained in this section…

The objective of IAS 36 Impairment of assets is to outline the procedures that an entity applies to ensure that its assets’ carrying values are not … Read more

Fair value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Valuation techniques Income approach

Valuation techniques Income approach converts future amounts (cash flows or income and expenses) to a single current (i.e. discounted) exit price amount.

Market-corroborated inputs

Market-corroborated inputs are inputs to fair value calculation models that are derived principally from observable market data by correlation or other means.

Fair value hierarchy

To increase the consistency and comparability in fair value measurements, IFRS 13 (paras 72-90) established a fair value hierarchy of level 1, 2 and 3 inputs

Fair value measurement in short

Fair value measurement in short is a brief introduction to some of the key terms used in fair value measurement, as well as a diagram that shows the flow in relation to the process of measuring fair value and determining the appropriate disclosures.

The key term that drives this process is fair value: the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is an exit price (e.g. the price to sell an asset rather than the price to buy that asset). An exit price embodies expectations about the future cash inflows and cash outflows associated with an asset or … Read more