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

The step-by-step IAS 36 impairment approach

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,
  • If and when? – Determining if and when a quantitative impairment test is necessary, jump to this part here
  • How? – Understanding the mechanics of the impairment test and how to recognise or reverse any impairment loss, if necessary, jump to this part here.

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 stated above their recoverable amounts (the amounts to be recovered through use or sale of the assets). To accomplish this … Read more

Diagnosed for importance decommissioning liability IFRS

Diagnosed for importance decommissioning liability IFRS – IAS 36 – Impact of a decommissioning liability in determining the recoverable amount of a Cash generating unit.

At a glance

Most liabilities are ignored when calculating recoverable amounts in impairment testing. However certain liabilities, such as decommissioning and restoration liabilities, cannot be separated from the related assets. This presents challenges when applying both the ‘fair value less costs of disposal’ approach and the ‘value in use’ approach. The IFRS Interpretations Diagnosed for importance decommissioning liability IFRS Committee (IC) considered how to apply the current guidance to a value in use calculation. The IC declined to take the issue on to the agenda as the guidance on value in use is clear, therefore neither an Interpretation nor an … Read more

Impairment of assets

Impairment of assets requires that the recoverable amount of an asset should be estimated whenever there is indication that the asset may be impaired.