Impairment of assets

meyer cohn
Mind Map by meyer cohn, updated more than 1 year ago
meyer cohn
Created by meyer cohn almost 5 years ago
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Review of impairments
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Impairment of assets
1 Recoverable amount: Higher of FV/ value in use
1.1 Fair value less cost of disposal
1.2 Value in Use: PV of future CFj from asset/CGU; Incl. CFj from cont. use & disposal at end
2 Impairment loss
2.1 Amount by which CA of asset exceed recoverable amount
3 Recognition & Measuring
3.1 Individual assets
3.1.1 Cost model - Recogn. loss in P/L; Revaluation model: 1st reverse revaluation then recogn left over in P/L
3.1.2
3.2 Cash-generating Unit (CGU)
3.2.1 1. Allocate to goodwil; 2. Pro rata to rest of assets; 3. LIMIT - CA of asset not reduced below higher of: - FV less selling cost; -Value in use
3.2.2 Reversal
3.2.2.1 Cost model - Recogn. in P/L; Revaluation model - Recogn. as revaluation increase; Loss on GOODWILL not reversed; LIMIT - Increased CA may not exceed CA without impairment.
3.3
4 Value in Use
4.1 Discount rate = PRE-TAX rate
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