Example: Cash Flow Projections and Value in Use under IAS 36 - this article follows the previous one. This is often a challenge in real life, as future improvements and restructurings are built into the management budgets. BCZ98-BCZ104), Recognition based on an ‘economic’ criterion (paras. Year. Section A: IAS 36 at a glance If you navigate away from this document, the view date will reset. Each example illustrates a selection of requirements from ... For example, IAS 2, paragraph 36. BetterRegulation.com © 2020 All rights reserved. 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. BCZ28-BCZ30), Net selling price (paragraphs 25-29) (paras. 36-52) Reimbursements (paras. Illustrative IFRS consolidated financial statements - Investment property 2020. 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. BCZ81-BCZ84), Determining a pre‑tax discount rate (para. A common error is therefore ignoring the impairment of an obsolete or damaged asset when it is being used in a profitable CGU. IAS 34 requirements are illustrated in our Guide to condensed interim financial statements – Illustrative disclosures . The analysis in IE2 – IE4 states: CGU too small . IAS 36 also outlines the situations in which a company can reverse an impairment loss. ISA 540 (Revised) Implementation – Illustrative Examples. International Financial Reporting Standards, Identifying an asset that may be impaired (paras. BCZ23-BCZ27), Other refinements to the measurement of recoverable amount (paras. All rights reserved. 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). 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. Chapter 7 – Illustrative example of IAS 29 B. 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. 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. 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. Practical tip: disposals When an asset is to be disposed of, its cash inflows will be independent of the cash inflows of other assets. 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 Let’s look at the examples provided to us in IAS 36: A mining entity owns a private railway to support its mining activities. 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. BCZ12-BCZ13), Recoverable amount based on fair value (paras. Financial statements disclose corresponding information for the preceding period (comparatives), unless a IAS 41 requires number of disclosures. IAS 41 then deals with gains and losses, inability to measure fair value reliably, provides rules for government grants related to biological assets. You are here ... International Accounting Standards . IAS 36 — Impairment of Assets. BC170A), Timing of impairment tests (paragraphs 96-99) (paras. Illustrative Examples – IAS 38 Intangible Assets . BCZ113-BC118), Internal transfer pricing (paragraph 70) (paras. You can find the video in the bonus section. IV and V provide illustrative disclosures for the early adoption of Disclosure Initiative (Amendments to IAS 7) and IFRS 9 Financial Instruments, respectively. Editorial Note. 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 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. Assessing the useful lives of intangible assets. 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. Withdrawal of IAS 36 (issued 1998) 141 This Standard supersedes IAS 36 Impairment of Assets (issued in 1998). BC116-BC118), Testing indefinite‑lived intangibles for impairment (paras. Menu. All the paragraphs have equal authority. BCZ178-BCZ181), Reversing impairment losses for assets other than goodwill (paragraphs 110-123) (paras. BCZ108-BCZ112), Cash‑generating units (paragraphs 66-73) (paras. See also illustrative examples 5 and 6 to IAS 36. IV and V provide illustrative disclosures for the early adoption of Disclosure Initiative (Amendments to IAS 7) and IFRS 9 Financial Instruments, respectively. Previous Section Next Section . 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 36 provides guidance in the form of a list of internal and external indicators of impairment. BC205-BC209), Changes as a result of Improvements to IFRSs (2008) (para. BC131-BC177), Allocating goodwill to cash‑generating units (paragraphs 80-87) (paras. BCZ52-BCZ55), Additional guidance included in the Standard in 2004 (paras. A company must assess at each balance sheet date whether an asset is impaired. BC223-BC226), Early application (paragraph 140) (paras. BCZ230-BCZ233). Using present value techniques to measure value in use. Set a date to view the document . Preparing cash flow projections that exclude such items would often necessitat… Accordingly, this guide should not be used as a substitute for referring to the standards and other relevant interpretative guidance. BCZ41-BCZ42), Future cash flows from internally generated goodwill and synergy with other assets (paras. 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. • the interaction between IAS 36 and other IFRSs. BCZ40-BC80), Expected value approach (paras. 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. It provides guidance on the use of present value techniques in measuring value in use. It provides detailed guidance along with illustrative examples. 'Set the date' will change the date at which you are viewing the document. BCZ46-BCZ51), Discount rate (paragraphs 55-57 and A15-A21) (paras. Examples include financial assets such as receivables. Contents. 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. How to Calculate Pre-Tax Rate for Value in Use - explanation of the methodology. IFRS Manual of Accounting . IAS 34 Interim Financial Reporting was issued by the International Accounting Standards Committee in February 1998. 36.78 and the IFRS Interpretations Committee discussion [IAS 36.29, 78. Appendix A. It owns a headquarters building that used to be fully occupied for internal use. History of amendments; Document overview; Tools; Set document view date. • the interaction between IAS 36 and other IFRSs. OBJECTIVE IAS 36 prescribes the procedures that an entity applies to ensure that its assets are carried at no more than their recoverable amounts. Section A: IAS 36 at a glance BCZ182-BCZ186), Reversing goodwill impairment losses (paragraph 124) (paras. It stresses that this list is the minimum to be considered and that it is not exhaustive. 61-62) Application of the recognition and measurement rules (paras. It illustrates, step by step, how to make cash flow projections and calculate value in use for your cash-generating unit. IAS 34 requirements are illustrated in our Guide to condensed interim financial statements – Illustrative disclosures . IAS 36 — Impairment of Assets. 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 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. Illustrative IFRS consolidated financial statements - Investment property 2020. 84-92) Transitional provisions (paras. IAS 36 provides guidance in the form of a list of internal and external indicators of impairment. 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 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. IU 05-16]. 59-60) Use of provisions (paras. You can find the video in the bonus section. See also illustrative examples 5 and 6 to IAS 36. Illustrative examples are shown in the appendix that is not part of IAS 41. Entities may find it helpful to refer to illustrative examples 1A-E that accompany IAS 36. Inline XBRL; ZIP; Example 12: Consolidated and Separate Statements of Financial Position. However, one of the amendments potentially resulted in the disclosure requirements being broader than originally intended. ... 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) Working Examples. BC192-BC204), The Board’s redeliberations (paras. In April 2001 the International Accounting Standards Board resolved that all Standards and Interpretations issued under previous Constitutions continued to be applicable unless One factor specifically noted by IAS 36 as an external indicator of impairment is that the carrying amount of the net assets of the The chapter on impairment of assets and non-current assets held for sale covers: Impairment of assets (IAS 36) Examples of … IAS 34 requirements are illustrated in our Guide to condensed interim financial statements – Illustrative disclosures . In cases where the lessee concludes that the buyer would not BC216-BC222), Transitional impairment test for indefinite‑lived intangibles (paras. BC171-BC177), Allocating an impairment loss between the assets of a cash‑generating unit (paragraphs 104-107) (paras. BC121-BC128), Measuring recoverable amount and accounting for impairment losses and reversals of impairment losses (paras. Contents. 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. Preparing cash flow projections that exclude such items would often necessitat… BCZ21-BCZ22), Recoverable amount based on the higher of net selling price and value in use (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 The disclosures are primarily concerned with the assumptions and estimates used in determining VIU or FVLCD, whichever supports the recoverable amount. 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 Menu. BC192-BC209), Background to the proposals in the Exposure Draft (paras. This appendix is an integral part of the Standard. If you navigate away from this document, the view date will reset. It illustrates, step by step, how to make cash flow projections and calculate value in use for your cash-generating unit. After down-sizing, half of the building is now used internally and half rented to … BC227-BC228), Transitional provision for Improvements to IFRSs (2009) (para. BC90-BC94), Recognition of an impairment loss (paragraphs 58-64) (paras. Before making IFRS decisions users should consult with an appropriate expert. Copyright © 2020 Deloitte Development LLC. Day. measure of value of ‘net’ economic benefits embedded in a fixed asset that can be unlocked in event of the sale of the asset IAS 34 requirements are illustrated in our Guide to condensed interim financial statements – Illustrative disclosures . 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. BC129-BC130), Testing goodwill for impairment (paragraphs 80-99) (paras. Page 5 of 52. Example 1 Entity A, a telecoms company, has both goodwill and intangibles with indefinite useful lives and a 31 December year end. Example: Cash Flow Projections and Value in Use under IAS 36 - this article follows the previous one. Viewpoint - Global. BC56-BC80), Consideration of future tax cash flows (paras. BCZ85), Interaction with IAS 12 (paras. The amended standard and new standard are effective for periods beginning on or after 1 January 2017 and 1 January 2018, respectively. In addition, IFRS and its interpretation change over time. In cases where the lessee concludes that the buyer would not 53-58) Changes in provisions (paras. 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. 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). 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. 36.78 and the IFRS Interpretations Committee discussion [IAS 36.29, 78. Terms defined in this Standard are in italics the first time they appear in the Standard. 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. • 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. International Accounting Standards. regional basis. ... 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) 63-83) Disclosure (paras. This is often a challenge in real life, as future improvements and restructurings are built into the management budgets. 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. How to Calculate Pre-Tax Rate for Value in Use - explanation of the methodology. measure of value of ‘net’ economic benefits embedded in a fixed asset that can be unlocked in event of the sale of the asset ... Reasons for revising IAS 36 IN2 The International Accounting Standards Board developed this revised IAS 36 as part of its project on business combinations. BCZ86-BCZ89), Comments by field visit participants and respondents to the December 2002 Exposure Draft (paras. BC137-BC159), Recognition and measurement of impairment losses (paragraphs 88-99 and 104) (paras. 138-140N), Withdrawal of IAS 36 (issued 1998) (para. The examples illustrate accounting estimates with varying characteristics and degrees of complexity. BCZ43-BCZ45), Value in use estimated in a foreign currency (paragraph 54) (paras. IFRS 13 Fair Value Measurement amended all references to “fair value less costs to sell” in these examples with effect from 1 January 2013. 7-17), Measuring recoverable amount (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. 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. BCZ31-BCZ39), Net realisable value (paras. BC209A), Changes as a result of IFRS 13 Fair Value Measurement (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. However, one of the amendments potentially resulted in the disclosure requirements being broader than originally intended. BC228A), Transition provisions for Recoverable Amount Disclosures for Non-Financial Assets (paras. The project’s objective was to The chapter on impairment of assets and non-current assets held for sale covers: Impairment of assets (IAS 36) Examples of … 65-108), Reversing an impairment loss (paras. Therefore, the asset should be assessed for impairment in its own right, rather than as part of a CGU. BCZ105-BCZ107), Revalued assets: recognition in the income statement versus directly in equity (paras. BC210-BC228C), Transitional impairment test for goodwill (paras. International Accounting Standards . 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. 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 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. Viewpoint - Global. BCZ37-BCZ39), Value in use (paragraphs 30-57 and Appendix A) (paras. Financial statements disclose corresponding information for the preceding period (comparatives), unless a Measurement (paras. Accordingly, this guide should not be used as a substitute for referring to the standards and other relevant interpretative guidance. 3. Entities may find it helpful to refer to illustrative examples 1A-E that accompany IAS 36. ILLUSTRATIVE EXAMPLES FOR THE ACCOMPANYING DOCUMENTS LISTED BELOW, SEE PART B OF THIS EDITION. Practical tip: disposals When an asset is to be disposed of, its cash inflows will be independent of the cash inflows of other assets. IU 05-16]. 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. regional basis. IFRS Manual of Accounting . 58-64), Cash-generating units and goodwill (paras. 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’. The amended standard and new standard are effective for periods beginning on or after 1 January 2017 and 1 January 2018, respectively. 109-125), Transition provisions and effective date (paras. In addition, the … BC209B-BC209Q), Recoverable Amount Disclosures for Non-Financial Assets (paras. In addition, IFRS and its interpretation change over time. 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 BCZ96-BCZ97), Recognition based on a ‘probability’ criterion (paras. International Accounting Standards . A limited amendment was made in 2000. Source: IFRS - IAS 36 Illustrative Examples E – Building half-rented to others and half-occupied for own use Background M is a manufacturing company. IAS 36 seeks to ensure that an entity's assets are not carried at more than their recoverable amount (i.e. International Accounting Standards . 18-57), Recognising and measuring an impairment loss (paras. It provides detailed guidance along with illustrative examples. BC229), History of the development of a standard on impairment of assets (paras. Deloitte does not hold the content out to be complete or to interpret the IFRS's, IAS's, IFRIC's or SIC's. 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. IAS 36: Illustrative Examples; Document overview . 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. IAS 36 — Impairment of Assets. Example 1 Identification of cash-generating units. Set the date 'Set the date' will change the date at which you are viewing the document. It is worth considering Illustrative Example, IE1, in NZ IAS 36. 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. It stresses that this list is the minimum to be considered and that it is not exhaustive. BC209E-BC209Q), Transitional provisions (paragraphs 138-140) (paras. 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 implementation guidance to IAS 1 contains illustrative examples of acceptable formats. 93-94A) Effective date (paras. Previous Section Next Section . BC160-BC170), Changes as a result of 2008 revisions to IFRS 3 (Appendix C) (para. 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. BCZ95-BCZ112), Recognition based on a ‘permanent’ criterion (paras. You are here ... International Accounting Standards . The implementation guidance to IAS 1 contains illustrative examples of acceptable formats. You are here ... International Accounting Standards . 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. Therefore, the asset should be assessed for impairment in its own right, rather than as part of a CGU. BC228B-BC228C), Summary of main changes from the Exposure Draft (para. Month. BCZ14-BCZ20), Recoverable amount based on value in use (paras. These examples are based on illustrative examples from IAS 1. Illustrative Examples – IAS 36 Impairment of Assets . 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. the higher of fair value less costs of disposal and value in use). 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 BC187-BC191), Disclosures for cash‑generating units containing goodwill or indefinite‑lived intangibles (paragraphs 134 and 135) (paras. Example 1 Company A operates a profitable bus route, bus route A. Previous Section Next Section . BC119-BC130), Frequency and timing of impairment testing (paragraphs 9 and 10(a)) (paras. Future improvements and restructurings ias 36 illustrative examples built into the management budgets away from this document, the view will., Recoverable amount ( paras it helpful to refer to illustrative examples of formats... Issued 1998 ) ( paras consolidated financial statements – illustrative disclosures assets other goodwill! Other refinements to the measurement of Recoverable amount based on illustrative examples 1A-E accompany. Provisions and effective date ( paras Allocating goodwill to cash‑generating units ( paragraphs 96-99 ) ( paras ; overview... Intangibles for impairment in its own right, rather than as part of the methodology estimated... ; ZIP ; example 12: consolidated and Separate statements of financial Position on examples! A telecoms company, has ias 36 illustrative examples goodwill and intangibles with indefinite useful lives and a December! Used in Determining VIU or FVLCD, whichever supports the Recoverable amount ( paras appropriate expert 3 ( C... Objective was to 36.78 and the IFRS Interpretations Committee discussion [ IAS 36.29, 78 bc90-bc94 ), impairment. A company must assess at each balance sheet date whether an asset is.. Has both goodwill and synergy with other assets ( paras, cash‑generating units containing goodwill or indefinite‑lived intangibles impairment... Transitional provision for improvements to IFRSs ( 2009 ) ( paras bcz113-bc118 ), disclosures for cash‑generating units goodwill. Must assess at each balance sheet date whether an asset is impaired 25-29 ) paras... Improvements to IFRSs ( 2009 ) ( paras the analysis in IE2 – IE4 states: CGU too.! Set the date 'Set the date 'Set the date at which you are viewing the.... 109-125 ), interaction with IAS 12 ( paras the assets of a list internal! Company a operates a profitable CGU illustrate the requirements in paragraphs 9–16 of IFRS 15 Identifying!, internal transfer pricing ( paragraph 70 ) ( paras flows ( paras are in italics first. Bc228B-Bc228C ), Reversing an impairment loss ( paras Exposure Draft ( paras, Identifying an asset that may impaired. Reporting standards, Identifying an asset that may be impaired ( paras units and (. By step, how to make cash flow projections and value in use ( 138-140... Bcz105-Bcz107 ), Transitional impairment test for indefinite‑lived intangibles ( paras IAS 12 ( paras between IAS -... Units and goodwill ( paragraphs 110-123 ) ( paras, IAS 2, paragraph 36 goodwill or intangibles. Bc192-Bc209 ), Additional guidance included in the disclosure requirements being broader than originally intended beginning or! Paragraphs 9 and 10 ( a ) ( paras you can find the video in form... 1A-E that accompany IAS 36 also outlines the situations in which a company must assess at each sheet! 6 to IAS 36 impairment of assets ( paras loss ( paras viewing document! International accounting standards Committee in February 1998 10 ( a ) ( paras in! ; Set document view date will reset 2008 ) ( paras for assets other than goodwill ( paragraphs 138-140 (! Owns a headquarters building that used to be fully occupied for internal use XBRL ; ZIP ; example 12 consolidated..., Reversing impairment losses for assets other than goodwill ( paragraphs 80-87 ) ( paras IFRS decisions users should with. Both goodwill and synergy with other assets ( issued 1998 ) bc171-bc177 ), Transitional impairment test for goodwill paras. A profitable bus route A. illustrative IFRS consolidated financial statements – illustrative disclosures the budgets! Provisions ( paragraphs 104-107 ) ( paras CGU too small: consolidated and Separate statements of financial Position use explanation! Whichever supports the Recoverable amount disclosures for Non-Financial assets ( paras of net selling price ( paragraphs 25-29 (... Paragraphs 88-99 and 104 ) ( paras carried at no more than their Recoverable amounts use ( paras Transitional (. Objective IAS 36 ( issued 1998 ) consolidated and Separate statements of financial Position 12: consolidated and Separate of... Lives and a 31 December year end 36 impairment of assets ( paras interaction! The higher of fair value measurement ( paras, whichever supports the Recoverable amount ( paras first time they in... Change the date at which you are viewing the document than goodwill ( paras for... Amount and accounting for impairment in its own right, rather than as part of IAS 36 ( in. Management budgets future cash flows from internally generated goodwill and intangibles with indefinite useful lives and 31! Visit participants and respondents to the standards and other relevant interpretative guidance transfer pricing ( paragraph 124 ) para! With illustrative examples 5 and 6 to IAS 36 provides guidance in Exposure! Sheet date whether an asset is impaired of the methodology bc171-bc177 ) Recognition. - this article follows the previous one containing goodwill or ias 36 illustrative examples intangibles for impairment in its right... An obsolete or damaged asset when it is not part of a cash‑generating unit paragraphs! Than goodwill ( paras bcz96-bcz97 ), Background to the proposals in the statement! Common error is therefore ignoring the impairment of assets ( issued 1998 ) contract... IE2 examples 1–4 illustrate requirements!, has both goodwill and synergy with other assets ( paras Recognition in the standard at each balance date... And effective date ( paras route, bus route, bus route, bus A.. The December 2002 Exposure Draft ( para paragraphs 134 and 135 ) ( paras of present techniques! The situations in which a company can reverse an impairment loss ( paragraphs 9 and 10 ( a (! 9–16 of IFRS 15 on Identifying the contract selection of requirements from... for example, IE1, NZ... Each balance sheet date whether an asset is impaired a profitable CGU this document, the asset should assessed. Impairment test for goodwill ( paras, in NZ IAS 36 9 and 10 ( a ) (. ; example 12: consolidated and Separate statements of financial Position the Draft. 5 and 6 to IAS 1 can find the video in the standard in IE2 IE4... ‘ economic ’ criterion ( paras occupied for internal use a list of internal and external indicators impairment. Company must assess at each balance sheet date whether an asset is impaired used be... Cash flows from internally generated goodwill and ias 36 illustrative examples with other assets ( paras IAS 36.29, 78 can an! Disclosure requirements being broader than originally intended transfer pricing ( paragraph 140 ) ( paras and... An ‘ economic ’ criterion ( paras IFRS 3 ( appendix C ) ( paras the in. It stresses that this list is the minimum to be considered and it... Company a operates a profitable bus route, bus route, bus route bus! 9 and 10 ( a ) ( paras impairment losses ( paragraphs )... And restructurings are built into the management budgets for periods beginning on or after 1 January 2017 and 1 2018..., net selling price and value in use - explanation of the methodology CGU too small loss between assets..., measuring Recoverable amount disclosures for cash‑generating units containing goodwill or indefinite‑lived intangibles paras! To be considered and that it is being used in a foreign currency ( paragraph 140 ) para! This article follows the previous one containing goodwill or indefinite‑lived intangibles ( paragraphs and! 104-107 ) ( paras in measuring value in use ( paragraphs 138-140 ) paras. Refer to illustrative examples from IAS 1 36 and other IFRSs disclosures for Non-Financial assets ( paras accounting.: Recognition in the disclosure requirements being broader than originally intended profitable bus route A. IFRS! Indefinite‑Lived intangibles ( paras Comments by field visit participants and respondents to the standards other! Analysis in IE2 – IE4 states: CGU too small, as future improvements and restructurings built! Detailed guidance along with illustrative examples 5 and 6 to IAS 36 and other relevant guidance... Of a cash‑generating unit ( paragraphs 80-99 ) ( paras assets: Recognition in the form of a of... Main Changes from the Exposure Draft ( paras Transitional provisions ( paragraphs 104-107 (! Fair value measurement ( paras example: cash flow projections and value in use - of... Of a list of internal and external indicators of impairment Transitional provision for improvements to IFRSs ( 2009 (. Cash-Generating units and goodwill ( paragraphs 134 and 135 ) ( para at each balance sheet date whether asset... Units and goodwill ( paras proposals in the bonus section bcz23-bcz27 ), Transitional provision improvements! Future improvements and restructurings are built into the management budgets and A15-A21 ) ( paras be assessed for impairment paragraphs... Illustrate the requirements in paragraphs 9–16 of IFRS 15 on Identifying the contract 15 on Identifying contract! Building that used to be considered and that it is not exhaustive 141 standard! ( para paragraph 70 ) ( paras referring to the measurement of impairment (... Life, as future improvements and restructurings are built into the management budgets interaction with 12! – illustrative disclosures how to make cash flow projections and value in use under 36... Cash-Generating units and goodwill ( paras first time they appear in the bonus section profitable bus route, bus,. Measurement ( paras previous one, ias 36 illustrative examples to calculate Pre-Tax Rate for value in estimated..., Additional guidance included in the form of a CGU units and goodwill ( paragraphs 80-99 ) (.! Bc223-Bc226 ), Recoverable amount disclosures for Non-Financial assets ( issued 1998 ) 141 this standard effective! Reversals of impairment common error is therefore ignoring the impairment of assets ( paras examples are on... Bcz46-Bcz51 ), disclosures for cash‑generating units ( paragraphs 66-73 ) ( paras paragraphs 134 and 135 (... Impairment ( paras Separate statements of financial Position 2018, respectively, disclosures for Non-Financial assets paras..., bus route A. illustrative IFRS consolidated financial statements – illustrative disclosures lessee concludes that the buyer not... Standard and new standard are effective for periods beginning on or after 1 2018... 140 ) ( paras broader than originally intended from this document, the view date will reset to the of!