Impairment Of An Asse

INTRODUCTION

The objective of IAS 36 Impairment of Assets is to prescribe the procedures that an entity applies to ensure that its summations atomic number 18 carried at no more than their recoverable amount. An asset is
carried at more than its recoverable amount if its carrying amount exceeds the amount
to be recovered through use or sale of the asset. If this is the case, the asset is described as impaired and the Standard requires the entity to recognise an balk loss.
1)
a. Identifying an asset that may be impaired

An entity shall assess at apiece reporting date whether there is every indication that an asset may be impaired. In assessing whether there is an indication that an asset may be impaired, an entity shall consider as a token(prenominal) a number of prescribed internal and external factors.
outside factors to be considered include:
a.Has the assets market squeeze to be declined of importly more than would be expected as a result of the passing game of time or normal use, during the plosive speech sound?

b.Have significant changes occurred during the period (or will occur in the near future) which adversely impact on the technological, market, economic or legal environs in which the entity ope roams or in the market to which the asset is sacred?

c.



Have market interest rates or separate market rates of return on investments increased during the period such that those increases are likely to affect the discount rate used in calculating the assets value in use and decrease the assets recoverable amount materially?

d.Is the carrying amount of the net assets of the entity more than its market capitalisation?

upcountry factors to be considered include:

a.Is there available evidence of obsolescence or physical damage of the asset?

b.Are there any significant changes with an adverse effect on the entity which have taken place during the period or are expected to take place in the near future, which impact on the extremity to which or the manner in which the asset is...If you want to extend a full essay, order it on our website: Ordercustompaper.com



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