IAS 36 (Impairment of Assets)

DAIF Chapter 4

Impairment

Carrying amount exceeds recoverable amount (recognized as expense in SPL)

Carrying amount

Costs - accumulated depreciation - impairment loss

Recoverable amount

Higher of fair value less costs of disposal and value in use

Fair value

Price

Assets - received to sell (ရောင်းရင်ရမယ့် amount)

Liability - paid to transfer (အကြွေးဆပ်မယ်ဆိုဆပ်ရမယ့် amount)

Value in use

Present value of future cash flows (Asset ကိုအကြောင်းပြပြီး နောင်အနာဂတ်မှာဝင်လာမယ့်ငွေရဲ့ present value)

Expected to derive from the asset

IAS 36 apply for NCA

Land and building

Plant and machinery

Intangible goodwill (from calculations)

No current assets

Review

Annually

Impairment or not

CA // RA

FV - costs of disposal // VIU (higher) = RA

Indications

External

Internal

External Indications

Significant fall in asset’s value

Adverse effects on entity (Tech, market, economy, law)

Increase in interest rates

Market value less than CA of net assets

Internal indications

Asset (Obsolescence, physical damage)

Adverse effects on assets (Significant reorganization within the entity)

Economic performance of assets (Worse than expected)