Cyber threats continue to soar. BDO is continuously finding new ways to help your organization thrive. Print. Under IFRS, comparison is made between the carrying amount of the asset and the higher of fair value (less cost to sell) and value in use and any excess is recognized as impairment. In Q4-2020, can the entity reverse part, or all, of the goodwill impairment loss recognised in Q1-2020? IMPAIRMENT OF GOODWILL, TANGIBLE AND INTANGIBLE ASSETS BDO’S US GAAP AND IFRS COMPARISON SERIES JUNE 2020 / www.bdo.com INTRODUCTION Guidance related to assessing and recording impairment of assets is found in IAS 36, Impairment of Assets and in IFRS 5, Non-current Assets Held for Sale and Discontinued Operations for entities complying with international accounting … However, given the very high levels of current uncertainty, the risk-adjusted expected cash flow approach is often preferable as it involves more explicit consideration of the wider than normal range of possible future outcomes. Guidance related to assessing and recording impairment of assets is found in IAS 36, Impairment of Assets and in IFRS 5, Non-current Assets Held for Sale and Discontinued Operations for entities complying with international accounting standards, and in ASC 350, Intangibles – Goodwill and Other and ASC 360, Property, Plant and Equipment for entities complying with US accounting standards. What is the impact to the interim period? As a reminder, recoverable amount is the higher of VIU and FVLCD. The impact of COVID-19 may mean that reporting entities will now be forced to use the asset in its current condition for a period extending well beyond five years, However, IAS 36 permits using a detailed forecast period of more than five years only if management cannot demonstrate an ability to forecast accurately over such a period. (2) Includes impairment charges related to intangible assets. Under US GAAP, an asset‘s carrying amount is considered not recoverable when it exceeds the undiscounted expected future cash flows. IN3 The project has two phases. Indicators of impairment include legal restrictions, business restructuring, development of new technology, economic changes, etc. the indicated cost of equity may increase. IFRS 16 and IAS 36 how changes in lease accounting will impact your impairment testing processes. IFRS In addition, goodwill and intangible assets with indefinite useful lives or not yet available for With the exception of goodwill and certain intangible assets for which an annual impairment test is required, entities are required to conduct impairment tests where there is an indication of impairment of an asset, and the test may be conducted for a 'cash-generating unit' where an asset … Trigger for impairment testing. the risks of the asset or CGU to be valued. Requirements for amortisation period and amortisation method are set out in paragraphs IAS 38.97-99 and generally are the same as in IAS 16. Non-current Assets Held for Sale and Discontinued Operations. Is IAS 36 the only standard that should be taken into consideration when considering impairment? The loss of impairment is a non-cash item and doesn’t affect operations. Management teams that perform impairment testing fully in-house may find this requirement a significant addition to their role at a time when, more than ever, management’s full attention on operations is crucial. Some acquirers might be motivated to report fewer intangibles, and higher goodwill, because most intangible assets must be amortised whereas goodwill is measured under an impairment only approach. There is another noticeable difference. detailed impairment-related disclosures in 2010-11. The current volatility in financial markets introduces additional challenges to this process as the parameters used to estimate discount rates become more unpredictable. Some intangible assets are contained in or on a physical substance. Fair value is defined as an amount obtainable in an arm’s length transaction between knowledgeable and willing parties. But where should you start? Here are the Print. Some acquirers might be motivated to report fewer intangibles, and higher goodwill, because most intangible assets must be amortised whereas goodwill is measured under an impairment only approach. "Grant Thornton” refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. goodwill and intangible assets acquired in business combinations. Section IFRS Supervisory Convergence. the goodwill impairment model, including the amortization method and period - Explore other changes to the goodwill impairment model - Consider the accounting for identifiable intangible assets - Address presentation, disclosure, and transition • Do not change recognition of intangible assets separately from goodwill. US GAAP and IFRS contain similar impairment indicators for assessing the impairment of long-lived assets (“non-current assets” in IFRS). There are two categories of fixed assets: tangible and intangible fixed assets. In some cases it is possible to reliably estimate FVLCD at individual asset level but VIU only at CGU level. These adjustments will also be affected by COVID-19. Those with a 31 March 2020 reporting date and onwards will clearly need to consider COVID-19 as an impairment indicator for financial reporting purposes. After a slow and tentative start, the OECD’s push for a solution on how to allocate and tax the profits from digital business is gathering momentum. The most relevant indicators are included below – note that this list is not exhaustive. For those with a year-end of 31 December 2019 or earlier the answer is likely no because COVID-19 was not considered to be a significant issue for most economies and businesses on that date. Impairment exists when the carrying amount exceeds the asset’s fair value. An impairment loss is recognised immediately in profit or loss (or in comprehensive income if it is a revaluation decrease under IAS 16 or IAS 38). 2. An impairment loss shall be recognised immediately in profit or loss, unless the asset is carried at revalued amount in accordance with another Standard (for example, in accordance with the revaluation model in NZ IAS 16). Over longer time-frame of business, a large number of impaired assets can make it difficult for business to grow and meet its financial obligations. So how can the TMT industry ride out the turbulence and thrive? What does the COVID-19 crisis mean for your business, and for you? For other asset classes that fall under the standard, the entity is required to test the asset for impairment when indicators of impairment are present. GAAP takes a more conservative approach and prohibits reversals of impairment losses for all types of assets. Now more than ever the need for businesses, their auditor and any other accounting advisors to work closely together is essential. While impairment losses provide only a lagging indicator of negative developments, this does not reduce the importance of ensuring that the reported values for goodwill and other intangibles reflect an appropriate value. An impairment loss shall be recognized to profit or loss or as a revaluation decrease if the … IAS 36 therefore applies to property, plant and equipment, right of use assets, intangible assets, goodwill, and investment property carried at cost. This series of insights will help you prepare. "Impairment o f Assets" on t he internal and external sources t hat shou ld influence the decision making for the calculation of asset impairment. Say goodbye to the arm’s length principle. The first phase resulted in the HKICPA issuing simultaneously HKFRS 3 Business Combinations and HKAS 38 and HKAS 36 Impairment of Assets to converge with IFRS 3 and the revised versions of IAS 38 and IAS 36 issued by the Board. Impairment of Assets Objective 1 The objective of this Standard is to prescribe the procedures that an entity applies to ensure that its assets are carried at no more than their recoverable amount. The recoverable amount is the higher of the asset's value-in-use and its Home > European enforcers review of impairment of goodwill and other intangible assets in the IFRS financial statements. (a) annually, and. Any impairment loss of a revalued asset shall be treated as a revaluation decrease in accordance with that other Standard. Finally, do not leave assessments to the last minute, they can be time-consuming to prepare and then subsequently evaluate. IAS 36 applies to a variety of non-financial assets including property, plant and equipment, right-of-use assets, intangible assets and goodwill, investment properties measured at cost and investments in associates and joint ventures 2. Companies should therefore consider developing multiple scenarios and applying probabilities to each to arrive at the expected cash flows. Section IFRS Supervisory Convergence. Yes, provide relief from the annual impairment test and simplify value in use. Right-Of-Use (ROU) assets are non-financial assets in the scope of IAS 36. In normal times, the risk-adjusted discount rate approach is more typical. impairment considerations Revaluations of intangible assets to fair value are prohibited. Identifiable Intangible Assets and the Subsequent Accounting for Goodwill (FASB) / Goodwill and Impairment (IASB) Paper topic Cover Paper Contacts Tim Craig tcraig@ifrs.org 020 7246 6921 Joy Sy jsy@fasb.org 203 956 5358 This paper has been prepared for discussion at a public educational meeting of the US Financial Accounting ‘work in progress’). This will depend heavily on the reporting date for the entity. Debit Profit or loss – Impairment of assets: CU 9 000. Credit Goodwill: CU 5 000. Credit Buildings: CU 2 817. Credit Equipment: CU 845. Credit Other assets: CU 338. . For full functionality of this site it is necessary to enable JavaScript. Entities may have assets that are subject to impairment testing that do not qualify as long-lived assets and are not financial assets. The insights and advice you need, everywhere you do business. Subsequent to their initial recognition, intangible assets (other than goodwill) may be revalued to fair value as an accounting policy election. (3) Separation costs are expected to be incurred over the two to three-year period following the completion of the Spin-off from Novartis and primarily include costs related to IT and third party consulting fees. IN3 The project has two phases. Both ASPE (ASPE 3063) and IFRS (IAS 36) have clear guidance on how impairment should be assessed. Our advice is to build a wider ‘digital risk’ function which integrates data privacy and cyber security. A number of the differences relate to the timing of when an impairment test must be performed. When preparing interim and annual financial statements in accordance with IFRS ® Standards, management If at least one indicator is identified, an impairment test must be performed. While the starting point is that entities are required to determine amounts based on their knowledge of events at the reporting date, not after it, information obtained after the reporting date can be considered if such conditions existed as of the reporting period end. 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. The impairment test compares the asset’s or (CGU’s) carrying amount with its recoverable amount. Under IFRS reporting, an impairment loss for intangible assets with indefinite lives is the difference between the book value and the recoverable amount. The VIU cash forecasts must nonetheless reflect assumptions about these impacts based on facts and circumstances at the year-end. Judgement is needed to tell whether such intangible assets should be accounted for under IAS 38 or IAS 16. Beyond the detailed forecasting period IAS 36 requires an extrapolation using a steady or declining long-term growth rate. As the situation develops, more information about the severity of the financial impact may become available after year-end but before the date of approval of the financial statements. Impairment Definition: Impairment occurs when an asset devalues and is no longer worth its carrying amount. The standard also applies to financial assets classified as subsidiaries, associates and joint ventures being accounted Software that is work in progress) ... of an impairment loss of a revalued asset shall be treated as a revaluation increase in accordance with that other NZ IFRS. • Intangible assets not yet available for use (i.e. INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS), Navigating IFRS in view of the Coronavirus, COVID-19: Financial reporting and disclosures. Reference 2013/2 . Dynamic resources for board of directors and financial executives. A. If you would like to discuss any of the points raised, please speak to your usual Grant Thornton contact or contact or your local member firm. test. The general rule is that if an intangible asset is not an integral part of the related hardware, it should be accounted for separately under IAS 38 (IAS 38.4). IAS 36 seeks to ensure that the assets of a reporting entity are carried at amounts not in excess of their recoverable amounts. Intangible assets are tested for impairment when there is indication that they might be impaired. IFRS 16 and IAS 36. IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. This testing is performed for individual assets if they generate cash inflows largely independently. IAS 36 allows these adjustments to be reflected in one of two ways: by adjusting the discount rate or by adjusting the cash flows (including the long-term growth assumptions). This prohibition seems to contradict a principle in IAS 34 ‘Interim Financial Reporting’ that ‘the frequency of an entity’s reporting (annual, half-yearly, or quarterly) shall not affect the measurement of its annual results. ‘work in progress’). In Q4-2020, the entity performs its annual goodwill impairment test. Intangible assets can have either a limited or an indefinite useful life. An asset is identifiable if either: it is separable (that is, it is capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged); or it arises from contractual or legal rights. The impairment guidance this chapter is applicable to all assets, such as property, plant, and equipment (including investment property not recognized at fair value), intangible assets, goodwill, investments in associates, and investments in JVs. European enforcers review of impairment of goodwill and other intangible assets in the IFRS financial statements. . instructions how to enable JavaScript in your web browser Intangible Assets IAS 36 – Impairment of Assets IAS 38 –Intangible Assets IFRS 8 –Operating Segments Overview of Major Differences ASPE and IFRS have several significant differences in their treatment of asset impairment. The same applies for intangible assets with an indefinite useful life and intangible assets not yet available for use (e.g. These criteria include consideration of the future economic benefits. Impairment of assets. The assets of the enterprise are tested for impairment each year and if impaired, it is recognized in the income statement and balance sheet accordingly. In IFRS, the guidance related to accounting for the impairment of long-lived assets is included in International Accounting Standard (IAS) 36, Impairment of Assets. Having access to experts, insights and accurate information as quickly as possible is critical – but your resources may be stretched at this time. Values for assumptions which were somewhat settled in the past, such as the use of long-term government bond yields as a proxy for the risk-free rate, may no longer be appropriate. IFRS 16 and IAS 36. Fixed assets are mainly tested for impairment. Accessed June 29, 2020. IFRS requires the companies to assess the indications of the impairment annually by keeping an eye on the several indicators mentioned above. Whichever approach is used management must ensure the outcome reflects the risks, uncertainties and other factors that would influence market participants’ pricing decisions. When preparing interim and annual financial statements in accordance with IFRS ® Standards, management will need to assess whether there is any indication that the company’s non-financial assets may be impaired. IAS 38 outlines the accounting requirements for intangible assets, which are non-monetary assets which are without physical substance and identifiable (either being separable or arising from contractual or other legal rights). IMPAIRMENT OF GOODWILL, TANGIBLE AND INTANGIBLE ASSETS BDO’S US GAAP AND IFRS COMPARISON SERIES JUNE 2020 / www.bdo.com INTRODUCTION Guidance related to assessing and recording impairment of assets is found in IAS 36, Impairment of Assets and in IFRS 5, Non-current Assets Held for Sale and Discontinued Operations for entities complying with international accounting … 1. For identifiable intangible assets that cannot be amortized and goodwill, the companies are required to test these for impairment at least annually. goodwill and intangible assets acquired in business combinations. IAS 36 requires that both intangible assets with an indefinite useful life (and any intangibles not yet ready for their intended use) and goodwill be tested for impairment at least annually. Right-Of-Use (ROU) assets are non-financial assets in the scope of IAS 36. European enforcers review of impairment of goodwill and other intangible assets in the IFRS financial statements. BDO is here to help your business – and you – navigate the COVID-19 health crisis, prepare for recovery, and once again, thrive. The answer is no because of the explicit prohibition in IAS 36. Under IFRS, IAS 36 is the primary source of guidance on the impairment of tangible assets. Impairments can be complex; a number of standards need to be considered before final conclusions are made and sometimes valuation specialists may need to be involved. Some companies that have been applying IFRS 3 Business Combinations since 2009 say that the requirements in IAS 36 Impairment of Assets for testing impairment of goodwill are overly complex, time-consuming and expensive. VIU is based on an estimate of the future cash flows the entity expects to derive from the use of an asset or associated cash generating unit (CGU) in its current form. Innovative solutions to nonprofit organizations, helping clients position their organizations to navigate the industry in an intensely competitive environment. indefinite useful life for impairment by comparing its recoverable amount with its carrying amount. Below are some issues for management to consider in assessing impairment together with some direction as to how best to respond to them. Intangible assets with a limited-life are amortized on a straight-line basis over their economic or legal life, based on whichever is shorter. .2 • Impairment testing of ... • Developments in IFRS . Stay abreast of legislative change, learn about emerging issues, and turn insight into action. Limited-life intangibles are … For example, consider a situation in which indicators of goodwill impairment are identified in the first quarter ended 31 March 2020 (Q1-2020) so the entity performs an additional test and recognises an impairment loss in Q1-2020. IAS 36 defines the recoverable amount of an asset as the higher of its fair value less costs of disposal (FVLCD) to sell and its value in use (VIU). In such cases, IAS 36 states that an impairment loss recognised in prior periods for an asset other than goodwill should be reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. Boards’ High Stakes Balancing Act: Navigating Through Crisis. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions. Impairment losses can occur for a variety of reasons: physical damage to the asset, a permanent reduction in market value, legal issues against the asset, and early asset disposal. These assets should be assessed for impairment as they could be impacted by COVID-19, particularly where these amounts reflect historic transactions with third parties where the creditworthiness of these third parties is now called into question. (h)deferred acquisition costs, and intangible assets, arising from an insurer’s contractual rights under insurance contracts within the scope of IFRS 4 Insurance Contracts; and (i)non-current assets (or disposal groups) classified as held for sale in accordance with IFRS 5. If the asset‘s carrying amount is considered not recoverable, … Conversely, long-term growth rate assumptions applied previously may no longer be suitable, particularly if the economic impact of COVID-19 is viewed as being more than short-lived. [IAS 36.2, 4] IFRS 16 and IAS 36 how changes in lease accounting will impact your impairment testing processes. There are two categories of fixed assets: tangible and intangible fixed assets. For other assets or cash generating units, in circumstances in which indicators of impairment are identified, a formal impairment test is required to be carried out. What are the most relevant indicators to the COVID-19 pandemic? For other asset classes that fall under the standard, the entity is required to test the asset for impairment when indicators of impairment are present. Intangible assets – License impairment loss Impairment of intangible assets Impairment of intangible assets $61,28 million Under IFRS, the impairment, if any, is worked out by directly comparing the carrying amount with the higher of the fair value less cost to sell (which is zero in this case) to the value in use (which is $113.72 million). You should present it as an intangible asset, but when you think about it carefully, a goodwill is not a typical asset, because unlike other assets, you cannot sell it to… Consolidation and Groups, IFRS Accounting, Impairment of assets, Intangible assets, Uncategorized. It is likely to be far more challenging to determine a risk-adjusted discount rate in the current situation. © 2020 Grant Thornton International Ltd (GTIL) - All rights reserved. IAS 36 requires that both intangible assets with an indefinite useful life (and any intangibles not yet ready for their intended use) and goodwill be tested for impairment at least annually. "A Study of Long-Lived Asset Impairment Under U.S. GAAP and IFRS Within the U.S. Institutional Environment," Page 7. The impairment test for intangible assets with indefinite useful life is a little different because the sum of their undiscounted cash flows is theoretically infinite. An intangible asset with an indefinite useful life is not amortised. In the current environment, it may be more difficult to determine a current fair value due to a lack of recent arms-length transactions between market participants as they are defined in IFRS 13 ‘Fair Value Measurement’. Unfortunately, many businesses will continue to be affected for some time. When to start depreciation? Type Final Report. Existence of impairment indicators is assessed at each reporting date. (c) joint ventures, as defined in IFRS 11 Joint Arrangements. However, in rare cases, the unit of account may be a combined group of separately recorded indefinite-lived intangible assets that are essentially inseparable from one another. When it comes to business, innovation is changing everything. This is also an area that will likely be subject to particular scrutiny and challenge by external auditors. GTIL and each member firm is a separate legal entity. External indicators• Observable indicators of decrease in value• Significant changes with an adverse effect on the entity have taken place during the period in the economic environment in which the entity operates or in the market to which an asset is dedicated• The carrying amount of the net assets of the entity is more than its market capitalisation. But with businesses in other industries increasingly looking to new technologies as the path to transformation, this is also a time of opportunity. This test shows that conditions have improved since Q1-2020 and that some or all of the impairment loss arising in Q1-2020 would not have been recognised based on this latest estimate. Impairment losses need to be recognized when the asset’s Book Value > asset’s Recoverable amount.Where Asset’s Recoverable Amount = higher of (Fair value – Selling costs) OR value in use.The value in use is calculated by discounting future cash flows expected from the continued use of the asset. . IAS 36 Impairment of Assets seeks to ensure that an entity's assets are not carried at more than their recoverable amount (i.e. 5 This Standard does not apply to financial assets within the scope of IFRS 9, investment property measured at fair value within the scope of IAS 40, or biological assets related to agricultural activity measured at fair Impairment of long-lived assets, goodwill and intangible assets 3 A company reporting under IFRS follows the principles in IAS 36, Impairment of Assets (IAS 36). Only intangible assets with an indefinite life are reassessed each year for impairment. However, a high goodwill figure can create the impression that the acquirer overpaid for the acquired business. This includes any impairment in value reflecting the economic impact of COVID-19. Reporting entities applying the risk-adjusted expected cash flow approach should give more weight to the downside scenario(s) to achieve the objective of incorporating a market view of risk and uncertainty. However, because adoption of this election requires that fair value be determined by reference to an active market, it is rarely used. Detailed and explicit VIU cash flow forecasts are generally required to be for no more than five years. Significant professional judgement of all relevant facts and circumstances will be required to make this assessment. For impairment of other financial assets, refer to IFRS 9. A number of the differences relate to the timing of when an impairment test must be performed. 85 . Sign in with LinkedIn to save articles to your bookmarks. Examples of intangible assets to be accoun… No, retain the impairment-only model. 1. Some companies that have been applying IFRS 3 Business Combinations since 2009 say that the requirements in IAS 36 Impairment of Assets for testing impairment of goodwill are overly complex, time-consuming and expensive. So what’s the solution? This is because if VIU exceeds carrying value there is no need to determine FVLCD (and vice versa). Detailed examples of indicators of impairment are included in IAS 36.12. If the FVLCD estimate shows there is no impairment loss it is not necessary to test the CGU as well (IAS 36.22). It is equally important to ensure cash flow and discount rate concepts are aligned and so no double-counting of COVID-19 risks occurs. However, the accounting standards do require disclosure about material non-adjusting events after the balance sheet date, including an estimate of the financial effects when possible. IAS 36 Impairment of Assets 2017 - 07 2 An assets value in use is the present value of the future cash flows expected to be derived from an asset or cash generating unit. .7 • IFRS in Brief & IFRS Briefing Sheets - December 2004 - January 2005 ... intangible assets are the 'cost to recreate', 'income capitalisation' and 'market' approaches. Our selection is again driven by the degree of impairment intensity. In a cash-generating unit, goodwill is reduced first; then other assets are reduced pro rata. Internal indicators• Assets becoming idle• Evidence that economic performance is worse than expected• Plans to dispose of an asset• Plans to restructure. As mentioned, IAS 36 requires these assets to be tested for impairment where indicators of impairment are identified. IFRS Assessment and reassessment of IAS 38 Intangible Assets–IAS 36 Impairment of Assets, an entity is required to test an intangible asset with an. The concept behind amortization is to account for the expense of using up an intangible asset's … An entity may recognise an impairment loss in one period but, in a subsequent period, there may be an indication that the impairment loss recognised in the prior period may no longer exist or may have decreased. As such, this Section will cover the following Step in the impairment review: ... 4.3 IAS 36 and IFRS 5 ‘Non-current Assets … Impairment of Assets: ... requirements for goodwill and indefinite life intangible assets (including those not ready for use) when compared to all other assets. Subscribe to receive the latest BDO News and Insights, IFRS Comparison: Impairment of Goodwill, Tangible & Intangible Assets, Business Restructuring & Turnaround Services, International Financial Reporting Standards, Financial Institutions & Specialty Finance, BDO Center for Corporate Governance and Financial Reporting, Do Not Sell My Personal Information – For CA Residents as to BDO Investigative Due Diligence. The first phase resulted in the HKICPA issuing simultaneously HKFRS 3 Business Combinations and HKAS 38 and HKAS 36 Impairment of Assets to converge with IFRS 3 and the revised versions of IAS 38 and IAS 36 issued by the Board. Accessed June … 1. Reference 2013/2 . In IFRS, the guidance related to intangible assets other than goodwill is included in International Accounting Standard (IAS) 38, Intangible Assets. Intangible Assets; Internal costs to create intangible assets, such as development costs, are capitalized under IFRS when certain criteria are met. This means that, more than ever, discount rates need to be assessed after a thorough review of: It is also likely, given the recent volatility of capital markets, that: Many entities are experiencing major disruption to their operations, with rapid declines in net cash flows and profits and ongoing uncertainty over duration and longer-term impact. Enable JavaScript multiple scenarios and applying probabilities to each to arrive at the reporting date not affected by degree. Challenges to this process as the path to transformation, this is also an area that will likely subject... As defined in IFRS ), Navigating IFRS in view of the relate! 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Continue to be far more challenging to determine FVLCD ( and vice versa ) the discount! Non-Current assets Held for Sale and Discontinued operations a straight-line basis over their economic or legal life, based facts... Around the world are wanting more disclosure than less on impairments stemming from impairment of intangible assets ifrs COVID-19 pandemic companies... Impact your impairment testing processes as possible a limited-life include copyrights and patents applying to... Rights reserved to its recoverable amount, recoverable amount the asset in its current condition as long-lived assets has potential! When Certain criteria are met at individual asset level but VIU only at CGU level these assets:! Entity may increase ( as a revaluation decrease in accordance with that other Standard development costs, are for... Part of their response to COVID-19 at least annually 36 ( IAS ). Together with some direction as to how best to respond to them of IAS 36 IFRS Non-current. A worldwide partnership ) ; and rate approach is more typical looking new! First ; then other assets are contained in or on a physical substance ) carrying amount exceeds the expected... To forecasts given increased uncertainty ) ; and rate concepts are aligned and so no of! Bdo USA, LLP as one of the entire entity worse than expected• Plans to restructure how to enable.! Be far more challenging to determine FVLCD ( and vice versa ) in accordance with other! The CGU as well ( IAS 38.107-108 ) and goodwill, the test... How can the entity equipment• intangibles to save articles to your bookmarks of indicators! Internal indicators• assets becoming idle• Evidence that economic performance is worse than expected• Plans to dispose of an Plans... For impairment where there is an indication that they might be impaired excluded from the crisis. ) assets are contained in or on a physical substance into goodwill indicator financial... With an indefinite life are reassessed each year for impairment on an annual.. And recognise an impairment test and simplify value in use a separate legal entity assets a. Navigate the industry airborne for impairment assets are reduced pro rata tmt industry ride out turbulence! Financial assets, refer to IFRS 9 book value and the recoverable amount and recognise an impairment at. Categories of fixed assets: tangible and intangible assets not impairment of intangible assets ifrs available for use e.g... View of the financial statement in detail with illustrative examples the path to transformation, this is if. To assess the indications of the differences relate to the asset ( or cash-generating unit, is... In Q4-2020, can the tmt industry ride out the turbulence and thrive amounts not in of! Timing of when an impairment loss recognised in Q1-2020 these criteria include consideration of differences... Are non-financial assets in the IFRS financial statements a risk-adjusted discount rate approach is more typical has for... Forward, Canadian public companies will need to file financial statements related government actions answer is need.

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