IAS 36 Impairment of Assets
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- čas přidán 19. 06. 2019
- In this session, I cover IAS 36 impairment of assets. IAS 36 is covered in international accounting and ACCA exam. IAS 36 Impairment of Assets sets out requirements for impairment which cover a range of assets (and groups of assets, termed 'cash generating units' or CGUs). The core underlying principle of IAS 36 Impairment of Assets is that an asset’s carrying value in the financial statements of the company should not exceed the highest amount the business can recover through its use or sale.
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The core principle in IAS 36 is that an asset must not be carried in the financial statements at more than the highest amount to be recovered through its use or sale. If the carrying amount exceeds the recoverable amount, the asset is described as impaired. The entity must reduce the carrying amount of the asset to its recoverable amount, and recognise an impairment loss. IAS 36 also applies to groups of assets that do not generate cash flows individually (known as cash-generating units).
IAS 36 applies to all assets except those for which other Standards address impairment. The exceptions include inventories, deferred tax assets, assets arising from employee benefits, financial assets within the scope of IFRS 9, investment property measured at fair value, biological assets within the scope of IAS 41, some assets arising from insurance contracts, and non-current assets held for sale.
The recoverable amount of the following assets in the scope of IAS 36 must be assessed each year: intangible assets with indefinite useful lives; intangible assets not yet available for use; and goodwill acquired in a business combination. The recoverable amount of other assets is assessed only when there is an indication that the asset may be impaired. Recoverable amount is the higher of (a) fair value less costs to sell and (b) value in use.
Fair value less costs to sell is the arm’s length sale price between knowledgeable willing parties less costs of disposal.
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going to take my cpa board in the philippines in october. your financial accounting videos are great help in refreshing concepts.
JazakAllah Sir Farhat, your lectures really helped me in gaining an insight of ias-36, may Almighty bless you.
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Very well explained. So easy to under. Thanks
I have really understood impairment very well. Thank you for well detailed explanation
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Best lectures on CZcams, very clear, and in-depth. thank you!
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Jazak 'Allah
Mr Farhat you really explained in elaborate way and with good practical examples
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Thanks Farhat for quick revision of this IAS.
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Nowadays I skip my university accounting classes cause I don't understand anything there. In place, I go through your videos which are very simple and easy to understand. Thank you so much! I have got semester exams in two weeks and your videos are truly helping me.
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Ur the best lecturer of CPA,salute to u sir...
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This is a concise and comprehensive explanation which helps a lot! Thank you for that!!
I have one question, what if the reversal amount was higher than the initial impairment loss, would we consider the remaining in OCI or income statement?
I learned so much in this video rather than listening to our teacher's 2 hour lecture. Thanks!
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Jazakallah sir.. It helped me out so much... i am really thankful to u..
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Tysm!
Thanks Prof. very clear and understood
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God bless you Mr. Farhat
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i benefited a lot from this lecture thanks
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Thank you for this video sir!
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Wonderful teaching ❤
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Very well explained, Thank you so much
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in the video of 9:55, you mention about approved budget and should cover a maximum of "five years" ; does this "five years" only your estimation based on your experience? or it is written in the IAS 36 rule? thanks before....
Great lecture
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Hello prof. Farhat
Nice job preparing this lecture - everything was really clear. Altough i feel like it lacks information about goodwill and differences between accounting goodwill against rest of assets and CGU.
If you ever decide to lecture that topic I'd be very greatful.
Sincerelly
Did you check my intermediate accounting lessons? Chapter 12?
czcams.com/video/F1dnky5d8po/video.html
Greate lecture like others
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Thank you!
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what happens with the extra $25000 since in theory the new book value of the equipment is $900000 which is above $8750000. for reference min 22:37
Sir what is the difference between impairment and revaluation
wow sir...respect from Pakistan. Hats off
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Hi Sir
How the increase in interest rate requires us to impair an asset, I am not able to connect this ?
Wouldn't it still make sense to record a revaluation gain of $25k to bring the Asset up to $900k, it's true value. We're trying to show our most accurate figures on statements, as is we're just fixing a previous error without giving a true reflection of our Assets.
Great lessons, but you need make it a bit slow to understand
Amazing, but the accent got me rewinding 5second back again and again haha.