Impairment test

From ACT Wiki
Revision as of 10:40, 11 October 2023 by Doug (talk | contribs) (Mend link.)
(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)
Jump to navigationJump to search

Financial reporting - impairment testing - international financial reporting standards (IFRS) - IAS 36.

Impairment testing is designed to ensure that the carrying amount of an asset (or Cash Generating Unit (CGU)) in a reporting entity's balance sheet does not exceed its recoverable amount.

The recoverable amount is the higher of:

  • Fair value less costs to sell the asset, and
  • Value in use


If the carrying amount is greater than the recoverable amount, an impairment must be recognised.


See also