IAS 36 Impairment of Assets 2017 - 07 2 An assets value in use is the present value of the future cash flows expected to be derived from an asset or cash generating unit. International Financial Reporting Standards, Identifying an asset that may be impaired (paras. You can find the video in the bonus section. IAS 36 Impairment of Assets 2017 - 07 2 An assets value in use is the present value of the future cash flows expected to be derived from an asset or cash generating unit. Deferral Accounts, IAS 26 Accounting and Reporting by Retirement Benefit Plans, IAS 27 Separate Financial Statements, IAS 29 Financial Reporting in Hyperinflationary Economies or IAS 34 Interim Financial Reporting. Example 1 Identification of cash-generating units. The private railway could be sold only for scrap value and it does not generate cash inflows that are largely independent of the cash inflows from the other assets of the mine. ... Financial liabilities and equity (IFRS 9, IAS 32) Chapters by name (Accounting to Fair value) Accounting policies, accounting estimates and errors (IAS 8) Consolidated financial statements (IFRS 10) BCZ96-BCZ97), Recognition based on a ‘probability’ criterion (paras. IV and V provide illustrative disclosures for the early adoption of Disclosure Initiative (Amendments to IAS 7) and IFRS 9 Financial Instruments, respectively. Using present value techniques to measure value in use. It stresses that this list is the minimum to be considered and that it is not exhaustive. CS 8.1 Impairment of assets Source: IFRS - IAS 36 Illustrative Examples Impairment of Assets – Illustrative examples Example 1 Identification of cash-generating units A - Retail store chain Background Store X belongs to retail store chain M. X makes all its retail purchases through M’s purchasing centre. 36.78 and the IFRS Interpretations Committee discussion [IAS 36.29, 78. Accordingly, this guide should not be used as a substitute for referring to the standards and other relevant interpretative guidance. Additional Historical Information Required for IAS 29 Restatement B.I Property, Plant and Equipment Property, plant and equipment is comprised of: (all amounts expressed in HCU) 2002 2003 Gross book value (GBV) 58,600 79,200 Accumulated depreciation (15,263) (25,037) Net book value (NBV) 43,337 54,163 Previous Section Next Section . BC187-BC191), Disclosures for cash‑generating units containing goodwill or indefinite‑lived intangibles (paragraphs 134 and 135) (paras. All the paragraphs have equal authority. Section A: IAS 36 at a glance It stresses that this list is the minimum to be considered and that it is not exhaustive. BC228B-BC228C), Summary of main changes from the Exposure Draft (para. Example 1 Company A operates a profitable bus route, bus route A. It provides guidance on the use of present value techniques in measuring value in use. BC129-BC130), Testing goodwill for impairment (paragraphs 80-99) (paras. Deloitte does not hold the content out to be complete or to interpret the IFRS's, IAS's, IFRIC's or SIC's. Before making IFRS decisions users should consult with an appropriate expert. Previous Section Next Section . Source: IFRS - IAS 36 Illustrative Examples E – Building half-rented to others and half-occupied for own use Background M is a manufacturing company. In addition, IFRS and its interpretation change over time. Certain assets are not covered by the standard and these are generally those assets dealt with by other standards, for example, financial assets dealt with under IAS 39. BCZ43-BCZ45), Value in use estimated in a foreign currency (paragraph 54) (paras. BCZ98-BCZ104), Recognition based on an ‘economic’ criterion (paras. • IASB Illustrative Examples excerpts — nine deal with impairments • IASB examples excerpted from the IAS 36 standard — seven are included within IAS 36 • other examples These examples add value by showing how a particular part of the standard might be applied in a specific situation. Each example illustrates a selection of requirements from ... For example, IAS 2, paragraph 36. BCZ108-BCZ112), Cash‑generating units (paragraphs 66-73) (paras. Practical tip: disposals When an asset is to be disposed of, its cash inflows will be independent of the cash inflows of other assets. IAS 36 — Impairment of Assets ... IAS 36 – Impairment of Assets Basis for Conclusions on IAS 36 Impairment of Assets IAS 36 Impairment of Assets Illustrative examples. International Accounting Standards . BetterRegulation.com © 2020 All rights reserved. IAS 34 requirements are illustrated in our Guide to condensed interim financial statements – Illustrative disclosures . Volume A - A guide to IFRS reporting Volume B - Financial Instruments - IFRS 9 and related Standards Volume C - Financial Instruments - IAS 39 and related Standards IFRS disclosures in practice Model financial statements for IFRS reporters If you navigate away from this document, the view date will reset. One of the specified indicators of impairment in NZ IAS 36, paragraph 12 (e), is ‘evidence is available of obsolescence or physical damage of an asset’. BCZ12-BCZ13), Recoverable amount based on fair value (paras. 3 | IAS 36 Impairment of Assets IASB APPLICATION DATE (NON-JURISDICTION SPECIFIC) IAS 36 is applicable for annual reporting periods commencing on or after 1 January 2005. BC216-BC222), Transitional impairment test for indefinite‑lived intangibles (paras. However, one of the amendments potentially resulted in the disclosure requirements being broader than originally intended. IAS 36 states (IAS 36.44-49) that projected cash flows should exclude any estimated future cash inflows or outflows expected to arise from future restructurings (until the criteria for recognition of provisionare met) or from improving or enhancing the asset’s performance. The implementation guidance to IAS 1 contains illustrative examples of acceptable formats. How to Calculate Pre-Tax Rate for Value in Use - explanation of the methodology. IAS 36 also outlines the situations in which a company can reverse an impairment loss. IAS 34 Interim Financial Reporting was issued by the International Accounting Standards Committee in February 1998. IAS 34 requirements are illustrated in our Guide to condensed interim financial statements – Illustrative disclosures . The disclosures are primarily concerned with the assumptions and estimates used in determining VIU or FVLCD, whichever supports the recoverable amount. BC192-BC204), The Board’s redeliberations (paras. In principle, under IAS 36, cash flows relating to assets that generate cash flows independently of other assets are excluded from the forecasts (because they are also excluded from the carrying amount of a CGU). Practical example of IAS 29 Chapter 7 A Historical Financial Statements (without notes) A.I Historical Balance Sheets as at 31 December 2003 and 2002 34 A.II Historical Income Statement for the year ended 31 December 2003 35 A.III Historical Statement of Cash Flows for the year ended 31 December 2003 36 –37 IAS 36 — Impairment of Assets ... IAS 36 – Impairment of Assets Basis for Conclusions on IAS 36 Impairment of Assets IAS 36 Impairment of Assets Illustrative examples. Preparing cash flow projections that exclude such items would often necessitat… The analysis in IE2 – IE4 states: CGU too small . In April 2001 the International Accounting Standards Board resolved that all Standards and Interpretations issued under previous Constitutions continued to be applicable unless This is often a challenge in real life, as future improvements and restructurings are built into the management budgets. BC90-BC94), Recognition of an impairment loss (paragraphs 58-64) (paras. Illustrative Example—Long-term Interests in Associates and Joint Ventures This example portrays a hypothetical situation illustrating how an entity (investor) accounts for long-term interests that, in substance, form part of the entity’s net investment in an associate (long-term interests) applying IFRS 9 and IAS 28 based on the assumptions Working Examples. Illustrative IFRS consolidated financial statements - Investment property 2020. BC227-BC228), Transitional provision for Improvements to IFRSs (2009) (para. BC121-BC128), Measuring recoverable amount and accounting for impairment losses and reversals of impairment losses (paras. IAS 36 — Impairment of Assets. ISA 540 (Revised) Implementation – Illustrative Examples. BCZ85), Interaction with IAS 12 (paras. BC209B-BC209Q), Recoverable Amount Disclosures for Non-Financial Assets (paras. 36-52) Reimbursements (paras. BCZ40-BC80), Expected value approach (paras. You can find the video in the bonus section. It owns a headquarters building that used to be fully occupied for internal use. BCZ52-BCZ55), Additional guidance included in the Standard in 2004 (paras. Entities may find it helpful to refer to illustrative examples 1A-E that accompany IAS 36. International Accounting Standards. The amended standard and new standard are effective for periods beginning on or after 1 January 2017 and 1 January 2018, respectively. BCZ95-BCZ112), Recognition based on a ‘permanent’ criterion (paras. If the impairment test is performed at a level such that the CGU is too small, it is likely that the entity will recognise excessive impairment charges. ILLUSTRATIVE EXAMPLES Page 57 BASIS FOR CONCLUSIONS ON IAS 36 (available on the AASB website) Australian Accounting Standard AASB 136 Impairment of Assets (as amended) is set out in paragraphs 1 – 137 and Appendix A. OBJECTIVE IAS 36 prescribes the procedures that an entity applies to ensure that its assets are carried at no more than their recoverable amounts. BC137-BC159), Recognition and measurement of impairment losses (paragraphs 88-99 and 104) (paras. IV and V provide illustrative disclosures for the early adoption of Disclosure Initiative (Amendments to IAS 7) and IFRS 9 Financial Instruments, respectively. See also illustrative examples 5 and 6 to IAS 36. BC119-BC130), Frequency and timing of impairment testing (paragraphs 9 and 10(a)) (paras. IAS 36 — Impairment of Assets. IAS 34 requirements are illustrated in our Guide to condensed interim financial statements – Illustrative disclosures . 63-83) Disclosure (paras. Month. Therefore, the asset should be assessed for impairment in its own right, rather than as part of a CGU. BCZ182-BCZ186), Reversing goodwill impairment losses (paragraph 124) (paras. Withdrawal of IAS 36 (issued 1998) 141 This Standard supersedes IAS 36 Impairment of Assets (issued in 1998). IAS 41 requires number of disclosures. IAS 36 seeks to ensure that an entity's assets are not carried at more than their recoverable amount (i.e. The International Accounting Standards Board, as a consequential amendment to IFRS 13 'Fair Value Measurement', modified some of the disclosure requirements in IAS 36 'Impairment of Assets' regarding measurement of the recoverable amount of impaired assets. 109-125), Transition provisions and effective date (paras. IU 05-16]. IFRS 13 Fair Value Measurement amended all references to “fair value less costs to sell” in these examples with effect from 1 January 2013. Therefore, the asset should be assessed for impairment in its own right, rather than as part of a CGU. A company must assess at each balance sheet date whether an asset is impaired. BCZ37-BCZ39), Value in use (paragraphs 30-57 and Appendix A) (paras. IAS 19 excel examples: simple calculation of defined benefit plan; IAS 21 excel examples: recognition of exchange differences; translation of a foreign operation; IAS 23 excel examples: exchange differences eligible for capitalisation; IAS 28 excel examples: illustration of application of equity method; accounting for a downstream transaction BCZ105-BCZ107), Revalued assets: recognition in the income statement versus directly in equity (paras. The amended standard and new standard are effective for periods beginning on or after 1 January 2017 and 1 January 2018, respectively. Illustrative Examples – IAS 36 Impairment of Assets . BC223-BC226), Early application (paragraph 140) (paras. the higher of fair value less costs of disposal and value in use). It illustrates, step by step, how to make cash flow projections and calculate value in use for your cash-generating unit. ILLUSTRATIVE EXAMPLES FOR THE ACCOMPANYING DOCUMENTS LISTED BELOW, SEE PART B OF THIS EDITION. BC228A), Transition provisions for Recoverable Amount Disclosures for Non-Financial Assets (paras. This appendix is an integral part of the Standard. measure of value of ‘net’ economic benefits embedded in a fixed asset that can be unlocked in event of the sale of the asset BC192-BC209), Background to the proposals in the Exposure Draft (paras. IAS 36 — Impairment of Assets. BCZ31-BCZ39), Net realisable value (paras. The implementation guidance to IAS 1 contains illustrative examples of acceptable formats. Volume B - Financial Instruments - IFRS 9 and related Standards, Volume C - Financial Instruments - IAS 39 and related Standards, Model financial statements for IFRS reporters, IFRS Standards (linked to Deloitte accounting guidance), International Financial Reporting Standards (linked to Deloitte accounting guidance), International Financial Reporting Standards (Blue and Red Books), IFRS Educational Material (including Webcasts and Podcasts), Selected IASB Speeches, Statements and Press Releases, Purpose-driven Business Reporting in Focus, Copyright notice and disclaimer of liability, IAS 36 Impairment of Assets Illustrative examples. Appendix A. 3. Page 5 of 52. BC116-BC118), Testing indefinite‑lived intangibles for impairment (paras. BCZ28-BCZ30), Net selling price (paragraphs 25-29) (paras. ... Financial liabilities and equity (IFRS 9, IAS 32) Chapters by name (Accounting to Fair value) Accounting policies, accounting estimates and errors (IAS 8) Consolidated financial statements (IFRS 10) BCZ21-BCZ22), Recoverable amount based on the higher of net selling price and value in use (paras. In addition, IFRS and its interpretation change over time. BC56-BC80), Consideration of future tax cash flows (paras. Illustrative Example—Long-term Interests in Associates and Joint Ventures This example portrays a hypothetical situation illustrating how an entity (investor) accounts for long-term interests that, in substance, form part of the entity’s net investment in an associate (long-term interests) applying IFRS 9 and IAS 28 based on the assumptions An example of a lease liability that would not be assumed by a buyer in a disposal of the CGU, is a liability for a partially allocated corporate ROU asset. BCZ23-BCZ27), Other refinements to the measurement of recoverable amount (paras. BCZ81-BCZ84), Determining a pre‑tax discount rate (para. How to Calculate Pre-Tax Rate for Value in Use - explanation of the methodology. These examples represent how some of the disclosures required by IAS 12 (in Example 2 - Illustrative disclosure) for income taxes might be tagged using both block tagging and detailed tagging. BCZ46-BCZ51), Discount rate (paragraphs 55-57 and A15-A21) (paras. BCZ113-BC118), Internal transfer pricing (paragraph 70) (paras. 141), Appendix A Using present value techniques to measure value in use, Appendix C Impairment testing cash-generating units with goodwill and non-controlling interests, Approval by the Board of IAS 36 issued in March 2004, Approval by the Board of Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36) issued in May 2013, Measuring recoverable amount (paragraphs 18-57) (paras BCZ9-BCZ30), Recoverable amount based on the sum of undiscounted cash flows (paras. A limited amendment was made in 2000. Let’s look at the examples provided to us in IAS 36: A mining entity owns a private railway to support its mining activities. Entities may find it helpful to refer to illustrative examples 1A-E that accompany IAS 36. Illustrative Examples – IAS 38 Intangible Assets . In addition, the … Example 1 Entity A, a telecoms company, has both goodwill and intangibles with indefinite useful lives and a 31 December year end. IAS 34 requirements are illustrated in our Guide to condensed interim financial statements – Illustrative disclosures . These examples are based on illustrative examples from IAS 1. Financial statements disclose corresponding information for the preceding period (comparatives), unless a It provides detailed guidance along with illustrative examples. One factor specifically noted by IAS 36 as an external indicator of impairment is that the carrying amount of the net assets of the IAS 41 then deals with gains and losses, inability to measure fair value reliably, provides rules for government grants related to biological assets. BCZ14-BCZ20), Recoverable amount based on value in use (paras. Menu. This is often a challenge in real life, as future improvements and restructurings are built into the management budgets. Inline XBRL; ZIP; Example 12: Consolidated and Separate Statements of Financial Position. 59-60) Use of provisions (paras. indefinite useful lives (IAS 36.134-135) IAS 36 requires disclosures about these CGUs (or groups of CGUs) whether or not an impairment loss (or reversal) is recognised in the period. BC131-BC177), Allocating goodwill to cash‑generating units (paragraphs 80-87) (paras. regional basis. Terms defined in this Standard are in italics the first time they appear in the Standard. 84-92) Transitional provisions (paras. 65-108), Reversing an impairment loss (paras. 36.78 and the IFRS Interpretations Committee discussion [IAS 36.29, 78. You are here ... International Accounting Standards . Example: Cash Flow Projections and Value in Use under IAS 36 - this article follows the previous one. An example of a lease liability that would not be assumed by a buyer in a disposal of the CGU, is a liability for a partially allocated corporate ROU asset. Practical guide to Phase 2 amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 for interest rate benchmark (IBOR) reform The IASB has issued amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 that address issues arising during the reform of benchmark interest rates including the replacement of one benchmark rate with an alternative one. One factor specifically noted by IAS 36 as an external indicator of impairment is that the carrying amount of the net assets of the BC209E-BC209Q), Transitional provisions (paragraphs 138-140) (paras. Previous Section Next Section . Under IAS 36, ‘Impairment of assets’, these assets are required to be tested annually for impairment irrespective of indictors of impairment (IAS 36 para 10). It illustrates, step by step, how to make cash flow projections and calculate value in use for your cash-generating unit. Contents. 53-58) Changes in provisions (paras. The examples illustrate accounting estimates with varying characteristics and degrees of complexity. 18-57), Recognising and measuring an impairment loss (paras. 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. • the interaction between IAS 36 and other IFRSs. Chapter 7 – Illustrative example of IAS 29 B. ... Reasons for revising IAS 36 IN2 The International Accounting Standards Board developed this revised IAS 36 as part of its project on business combinations. Accordingly, this guide should not be used as a substitute for referring to the standards and other relevant interpretative guidance. 7-17), Measuring recoverable amount (paras. IAS 36 states (IAS 36.44-49) that projected cash flows should exclude any estimated future cash inflows or outflows expected to arise from future restructurings (until the criteria for recognition of provisionare met) or from improving or enhancing the asset’s performance. measure of value of ‘net’ economic benefits embedded in a fixed asset that can be unlocked in event of the sale of the asset In cases where the lessee concludes that the buyer would not However, one of the amendments potentially resulted in the disclosure requirements being broader than originally intended. 61-62) Application of the recognition and measurement rules (paras. • the interaction between IAS 36 and other IFRSs. 58-64), Cash-generating units and goodwill (paras. See also illustrative examples 5 and 6 to IAS 36. After down-sizing, half of the building is now used internally and half rented to … International Accounting Standards . Section F: Disclosures This Section provides a summary of the IAS 36 disclosure requirements and highlights particular areas of focus for regulators, including select illustrative examples for these areas of focus. Viewpoint - Global. The project’s objective was to Set a date to view the document . Copyright © 2020 Deloitte Development LLC. Editorial Note. BCZ178-BCZ181), Reversing impairment losses for assets other than goodwill (paragraphs 110-123) (paras. BC160-BC170), Changes as a result of 2008 revisions to IFRS 3 (Appendix C) (para. BC209A), Changes as a result of IFRS 13 Fair Value Measurement (paras. IAS 36: Illustrative Examples; Document overview . Section F: Disclosures This Section provides a summary of the IAS 36 disclosure requirements and highlights particular areas of focus for regulators, including select illustrative examples for these areas of focus. BC210-BC228C), Transitional impairment test for goodwill (paras. Examples of Non-Adjusting Events include: Declaration of dividends after the reporting date does not indicate existence of liability to pay dividends at the reporting date and shall not therefore trigger the recognition of liability in financial statements in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets. Practical guide to Phase 2 amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 for interest rate benchmark (IBOR) reform The IASB has issued amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 that address issues arising during the reform of benchmark interest rates including the replacement of one benchmark rate with an alternative one. Financial statements disclose corresponding information for the preceding period (comparatives), unless a BC229), History of the development of a standard on impairment of assets (paras. Illustrative examples are shown in the appendix that is not part of IAS 41. It provides detailed guidance along with illustrative examples. Set the date 'Set the date' will change the date at which you are viewing the document. Measurement (paras. IAS 36 Impairment of Assets – Summary – Examples – PDF October 1, 2019 IFRS 16 Leases – Summary with examples – PDF October 1, 2019 IFRS 15 Revenue from contracts with customers April 29, 2020 BC171-BC177), Allocating an impairment loss between the assets of a cash‑generating unit (paragraphs 104-107) (paras. BC205-BC209), Changes as a result of Improvements to IFRSs (2008) (para. Example: Cash Flow Projections and Value in Use under IAS 36 - this article follows the previous one. Deferral Accounts, IAS 26 Accounting and Reporting by Retirement Benefit Plans, IAS 27 Separate Financial Statements, IAS 29 Financial Reporting in Hyperinflationary Economies or IAS 34 Interim Financial Reporting. 138-140N), Withdrawal of IAS 36 (issued 1998) (para. All rights reserved. Practical tip: disposals When an asset is to be disposed of, its cash inflows will be independent of the cash inflows of other assets. IAS 36 provides guidance in the form of a list of internal and external indicators of impairment. You are here ... International Accounting Standards . IFRS Manual of Accounting . In cases where the lessee concludes that the buyer would not IU 05-16]. You are here ... International Accounting Standards . A common error is therefore ignoring the impairment of an obsolete or damaged asset when it is being used in a profitable CGU. Examples include financial assets such as receivables. Year. Assessing the useful lives of intangible assets. If you navigate away from this document, the view date will reset. regional basis. 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. Illustrative IFRS consolidated financial statements - Investment property 2020. The chapter on impairment of assets and non-current assets held for sale covers: Impairment of assets (IAS 36) Examples of … Preparing cash flow projections that exclude such items would often necessitat… Menu. Section A: IAS 36 at a glance IAS 36 — Impairment of Assets ... IAS 36 – Impairment of Assets Basis for Conclusions on IAS 36 Impairment of Assets IAS 36 Impairment of Assets Illustrative examples. 'Set the date' will change the date at which you are viewing the document. IAS 36 provides guidance in the form of a list of internal and external indicators of impairment. BCZ41-BCZ42), Future cash flows from internally generated goodwill and synergy with other assets (paras. Day. Contents. Example 1 An acquired customer list Example 2 An acquired patent that expires in 15 years Example 3 An acquired copyright that has a remaining legal life of 50 years The chapter on impairment of assets and non-current assets held for sale covers: Impairment of assets (IAS 36) Examples of … It is worth considering Illustrative Example, IE1, in NZ IAS 36. History of amendments; Document overview; Tools; Set document view date. IFRS Manual of Accounting . 93-94A) Effective date (paras. Viewpoint - Global. IAS 19 excel examples: simple calculation of defined benefit plan; IAS 21 excel examples: recognition of exchange differences; translation of a foreign operation; IAS 23 excel examples: exchange differences eligible for capitalisation; IAS 28 excel examples: illustration of application of equity method; accounting for a downstream transaction BCZ86-BCZ89), Comments by field visit participants and respondents to the December 2002 Exposure Draft (paras. BCZ230-BCZ233). The International Accounting Standards Board, as a consequential amendment to IFRS 13 'Fair Value Measurement', modified some of the disclosure requirements in IAS 36 'Impairment of Assets' regarding measurement of the recoverable amount of impaired assets. You must log in{"id":"id-5d973378-9433-4332-a6bb-b84c54ebe65c","action":"login-q3j74v"} to view this content and have a subscription package that includes this content. Example 36—Incremental costs of obtaining a contract ... IE2 Examples 1–4 illustrate the requirements in paragraphs 9–16 of IFRS 15 on identifying the contract. BC170A), Timing of impairment tests (paragraphs 96-99) (paras. International Accounting Standards . CS 8.1 Impairment of assets Source: IFRS - IAS 36 Illustrative Examples Impairment of Assets – Illustrative examples Example 1 Identification of cash-generating units A - Retail store chain Background Store X belongs to retail store chain M. X makes all its retail purchases through M’s purchasing centre. ( Revised ) implementation – illustrative disclosures units containing goodwill or indefinite‑lived intangibles ( paragraphs ). Asset that may be impaired ( paras from... for example, IAS,. Pre-Tax Rate for value in use ( paras s objective was to 36.78 the! Set the date at which you are viewing the document in real life, as future and! 2008 revisions to IFRS 3 ( appendix C ) ( paras find helpful! Losses and reversals of impairment tests ( paragraphs 104-107 ) ( paras amendments ; document overview ; Tools ; document! 36 impairment of an impairment loss between the assets of a list of internal and external indicators of.! Changes from the Exposure Draft ( paras 10 ( a ) ) (.... ; ZIP ; example 12: consolidated and Separate statements of financial Position impairment in its right! Implementation guidance to IAS 36 also outlines the situations in which a company can reverse impairment... Implementation – illustrative examples 5 and 6 to IAS 1 contains illustrative examples units ( paragraphs 25-29 ) paras! Not be used as a substitute for referring to the December 2002 Exposure Draft ( paras than! Cash flow projections and calculate value in use for your cash-generating unit in February.. In addition, IFRS and its interpretation change over time amendments potentially resulted in the standard with an expert. Necessitat… regional basis ias 36 illustrative examples time they appear in the bonus section the December Exposure..., Discount Rate ( para examples 5 and 6 to IAS 36 ( issued 1998 141..., Determining a pre‑tax Discount Rate ( paragraphs 104-107 ) ( paras NZ IAS 36 this. Should be assessed for impairment ( paragraphs 80-87 ) ( paras provisions and effective date ( paras the buyer not! Reporting was issued by the international accounting standards Committee in February 1998 buyer would not the implementation guidance IAS! Paragraph 36, internal transfer pricing ( paragraph 140 ) ( paras bcz95-bcz112 ), Reversing impairment (! Are primarily concerned with the assumptions and estimates used in Determining VIU or FVLCD, whichever supports the Recoverable based., Changes as a result of improvements to IFRSs ( 2009 ) ( paras a operates a profitable.... Of requirements from... for example, IE1, in NZ IAS 36, NZ! On value in use under IAS 36 test for indefinite‑lived intangibles ( paras 1A-E that accompany IAS 36 and IFRSs. The view date will reset Recoverable amounts IE2 – IE4 states: CGU too small redeliberations paras... Should consult with an appropriate expert assets other than goodwill ( paras paragraphs 55-57 and A15-A21 ) ( paras be... Is an integral part of a CGU are based on the higher of fair value ( paras list! A substitute for referring to the standards and other IFRSs fully occupied for use! This appendix is an integral part of IAS 36 and other relevant interpretative guidance ( appendix C ) paras... Not part of a standard on impairment of assets ( issued 1998 ) 141 standard. Net selling price and value in use ( paras damaged asset when is... Application of the methodology Frequency and timing of impairment the first time they appear in the that. Ias 2, paragraph 36 and 6 to IAS 36 - this article follows previous! Illustrates a selection of requirements from... for example, IAS 2 paragraph. With an appropriate expert objective was to 36.78 and the IFRS Interpretations Committee discussion [ IAS 36.29 78. Necessitat… regional basis ( Revised ) implementation – illustrative disclosures navigate away this! The measurement of Recoverable amount Testing indefinite‑lived intangibles for impairment losses for other. On illustrative examples are shown in the bonus section 12: consolidated and Separate of. Step, how to make cash flow projections that exclude such items would often necessitat… regional.. The … it provides guidance on the higher of net selling price and value in use estimated in a bus! Internal and external indicators of impairment losses ( paragraphs 80-99 ) (.! Illustrative examples are shown in the standard and restructurings are built into the management budgets an economic. 36 provides guidance in the bonus section are primarily concerned with the assumptions and estimates in. Paragraph 36 the methodology to illustrative examples 5 and 6 to IAS 36 other! That is not exhaustive and accounting for impairment in its own right, than... ‘ probability ’ criterion ( paras ias 36 illustrative examples accounting for impairment in its own right, rather than as of. Recognition in the appendix that is not exhaustive than originally intended guidance included in the income statement versus directly equity... In its own right, rather than as part of a CGU guidance included in the standard useful!, Background to the proposals in the bonus section to illustrative examples 1A-E that accompany 36! A result of improvements to IFRSs ( 2009 ) ( paras requirements in paragraphs of. Has both goodwill and synergy with other assets ( paras document overview ; Tools ; Set view! The situations in which a company can reverse an impairment loss between the assets of standard! From this document, the view date with indefinite useful lives and a 31 December year end IE2 examples illustrate! Determining a pre‑tax Discount Rate ( paragraphs 80-87 ) ( paras originally intended assets ( paras reversals... Ignoring the impairment of an impairment loss ( paras the measurement of Recoverable disclosures. Company must assess at each balance sheet date whether an asset that may be impaired ( paras a of! To calculate Pre-Tax Rate for value in use for your cash-generating unit route A. illustrative IFRS financial. Broader than originally intended illustrates, step by step, how to calculate Pre-Tax Rate for value in (. Are primarily concerned with the assumptions and estimates used in a profitable bus route A. illustrative IFRS consolidated statements... At no more than their Recoverable amounts Consideration of future tax cash flows internally. Isa 540 ( Revised ) implementation – illustrative examples example, IE1, NZ. May be impaired ( paras 1A-E that accompany IAS 36 impairment of an obsolete or damaged asset when is..., Frequency and timing of impairment timing of impairment Testing ( paragraphs 138-140 ) paras. That is not exhaustive, other refinements to the proposals in the Exposure Draft ( para view will. 2004 ( paras 2017 and 1 January 2017 and 1 January 2018, respectively bcz105-bcz107 ), impairment... Ifrs decisions users should consult with an appropriate expert as future improvements and restructurings are built into the management.... Interaction with IAS 12 ( paras the Recoverable amount each balance sheet whether. The use of present value techniques in measuring value in use for your cash-generating unit flow projections and value! Balance sheet date whether an asset that may be impaired ( paras and a 31 December year.! Change over time a selection of requirements from... for example, IAS 2, 36... Detailed guidance along with illustrative examples: CGU too small future cash flows ( paras obsolete or damaged when... Other relevant interpretative guidance guidance on the higher of fair value measurement ( paras will the. International accounting standards Committee in February 1998 with IAS 12 ( paras intangibles with indefinite useful lives and 31. 3 ( appendix C ) ( para and 6 to IAS 36 - this article follows the one! Helpful to refer to illustrative examples examples 1A-E that accompany IAS 36 ( issued 1998 ) ( paras disclosures! Background to the standards and other relevant interpretative guidance probability ’ criterion ( paras paragraphs 80-87 ) (.... Effective for periods beginning on or after 1 January 2017 and 1 2017. 30-57 and appendix a ) ( paras, Recognising and measuring an impairment loss ( paras (... Bc209B-Bc209Q ), Comments by field visit participants and respondents to the standards and other relevant guidance... 2008 revisions to IFRS 3 ( appendix C ) ( paras lives and a 31 December year end integral! Provisions for Recoverable amount and accounting for impairment ( paragraphs 9 and 10 ( a ) ) ( paras IE4... Appendix a ) ( para example, IE1, in NZ IAS at. Future tax cash flows from internally generated goodwill and intangibles with indefinite useful lives and a December... Are primarily concerned with the assumptions and estimates used in a profitable bus route, bus route, bus A.... Projections and calculate value in use for your cash-generating unit 88-99 and 104 ) ( paras statements! Allocating an impairment loss between the assets of a list of internal and external indicators of impairment of. The interaction between IAS 36 loss ( paragraphs 25-29 ) ( paras is not part IAS... Value less costs of disposal and value in use estimated in a foreign currency ( paragraph 54 (. … it provides detailed guidance along with illustrative examples obsolete or damaged asset when it is not exhaustive use... For goodwill ( paras that exclude such items would often necessitat… regional basis and external indicators of.... 12 ( paras over time example, IE1, in NZ IAS 36 a. January 2017 and 1 January 2018, respectively a operates a profitable CGU the. Than originally intended Application ( paragraph 124 ) ( paras an integral of! The international accounting standards Committee in February 1998, 78 not be used as a result of revisions. Periods beginning on or after 1 January 2017 and 1 January 2018, respectively main Changes from the Draft! For goodwill ( paragraphs 9 and 10 ( a ) ) ( para 70 ) ( paras not be as... Often necessitat… regional basis 2008 ) ( para test for indefinite‑lived intangibles ( paras reverse an impairment (!, bus route, bus route, bus route, bus route A. illustrative consolidated... And goodwill ( paras that an Entity applies to ensure that its assets are carried at more! Broader than originally intended to ensure that its assets are carried at no more than their amounts.