Impairment of assets

Description

Review of impairments
meyer cohn
Mind Map by meyer cohn, updated more than 1 year ago
meyer cohn
Created by meyer cohn about 9 years ago
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Resource summary

Impairment of assets
  1. Recoverable amount: Higher of FV/ value in use
    1. Fair value less cost of disposal
      1. Value in Use: PV of future CFj from asset/CGU; Incl. CFj from cont. use & disposal at end
      2. Impairment loss
        1. Amount by which CA of asset exceed recoverable amount
        2. Recognition & Measuring
          1. Individual assets
            1. Cost model - Recogn. loss in P/L; Revaluation model: 1st reverse revaluation then recogn left over in P/L
              1. Cash-generating Unit (CGU)
                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
                  1. Reversal
                    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.
                  2. Value in Use
                    1. Discount rate = PRE-TAX rate
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