net assets of the company higher than market capitalisation.negative changes in technology, markets, economy, or laws.goodwill acquired in a business combination.an intangible asset not yet available for use.an intangible asset with an indefinite useful life.In some cases, the most recent detailed calculation of recoverable amount made in a preceding period may be used in the impairment test for that asset in the current period: The recoverable amounts of the following types of intangible assets are measured annually whether or not there is any indication that it may be impaired. If there is an indication that an asset may be impaired, then the asset's recoverable amount must be calculated. IAS 36 has a list of external and internal indicators of impairment. its carrying amount may be higher than its recoverable amount). Value in use: the present value of the future cash flows expected to be derived from an asset or cash-generating unit Identifying an asset that may be impairedĪt the end of each reporting period, an entity is required to assess whether there is any indication that an asset may be impaired (i.e.
* Prior to consequential amendments made by IFRS 13 Fair Value Measurement, this was referred to as 'fair value less costs to sell'.įair 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 (see IFRS 13 Fair Value Measurement ) Recoverable amount: the higher of an asset's fair value less costs of disposal* (sometimes called net selling price) and its value in use Impairment loss: the amount by which the carrying amount of an asset or cash-generating unit exceeds its recoverable amountĬarrying amount: the amount at which an asset is recognised in the balance sheet after deducting accumulated depreciation and accumulated impairment losses assets carried at revalued amounts under IAS 16 and IAS 38.investments in subsidiaries, associates, and joint ventures carried at cost.Therefore, IAS 36 applies to (among other assets): non-current assets held for sale (see IFRS 5).agricultural assets carried at fair value (see IAS 41).investment property carried at fair value (see IAS 40).assets arising from employee benefits (see IAS 19).assets arising from construction contracts (see IAS 11).To ensure that assets are carried at no more than their recoverable amount, and to define how recoverable amount is determined. Operative for financial statements covering periods beginning on or after 1 July 1999Īpplies to goodwill and intangible assets acquired in business combinations for which the agreement date is on or after 31 March 2004, and for all other assets prospectively from the beginning of the first annual period beginning on or after 31 March 2004Īmended by Annual Improvements to IFRSs 2007 (disclosure of estimates used to determine a recoverable amount)Įffective for annual periods beginning on or after 1 January 2009Īmended by Annual Improvements to IFRSs 2009 (units of accounting for goodwill impairment testing using segments under IFRS 8 before aggregation)Įffective for annual periods beginning on or after 1 January 2010Īmended by Recoverable Amount Disclosures for Non-Financial Assets (clarification of disclosures required)Įffective for annual periods beginning on or after 1 January 2014Īmendments under consideration by the IASB IAS 39 - Financial Instruments: Recognition and Measurement.
IAS 37 - Provisions, Contingent Liabilities and Contingent Assets.IAS 35 - Discontinuing Operations (Superseded).IAS 32 - Financial Instruments: Presentation.IAS 30 - Disclosures in the Financial Statements of Banks and Similar Financial Institutions.IAS 29 - Financial Reporting in Hyperinflationary Economies.IAS 28 - Investments in Associates (2003).IAS 28 - Investments in Associates and Joint Ventures (2011).IAS 27 - Consolidated and Separate Financial Statements (2008).IAS 27 - Separate Financial Statements (2011).IAS 26 - Accounting and Reporting by Retirement Benefit Plans.IAS 22 - Business Combinations (Superseded).IAS 21 - The Effects of Changes in Foreign Exchange Rates.IAS 20 - Accounting for Government Grants and Disclosure of Government Assistance.IAS 19 - Employee Benefits (1998) (superseded).IAS 15 - Information Reflecting the Effects of Changing Prices (Withdrawn).IAS 14 - Segment Reporting (Superseded).IAS 10 - Events After the Reporting Period.IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors.IAS 1 - Presentation of Financial Statements.
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