International GAAP 2013: Generally Accepted Accounting Principles under International Financial Reporting Standards

Chapter 22

Impairment of fixed assets and goodwill

1 Introduction

1.1 The theory behind the impairment review

1.2 Testing assets or cash-generating units

2 The requirements of IAS 36

2.1 Scope

2.2 When an impairment test is required

2.2.1 Indicators of impairment

2.2.1.A Market capitalisation

2.2.1.B Future performance

2.2.1.C Individual assets or part of CGU?

2.2.1.D Interest rates

2.3 Recoverable amount

2.3.1 Impairment of assets held for sale

3 Fair value less costs of disposal

3.1 Estimating FVLCD

3.2 Differences between fair value and value in use

4 Determining value in use (VIU)

4.1 Dividing the entity into cash-generating units (CGUs)

4.1.1 Active markets and identifying CGUs

4.2 Goodwill and its allocation to cash-generating units

4.2.1 The effect of IFRS 8 – Operating Segments – on impairment tests

4.2.2 Aggregation of operating segments for disclosure purposes

4.2.3 Goodwill initially unallocated to cash-generating units

4.3 Identifying the carrying amount of CGU assets

4.3.1 Consistency and the impairment test

4.3.1.A Environmental provisions and similar provisions and liabilities

4.3.1.B Finance leases

4.3.1.C Trade debtors and creditors

4.3.1.D Pensions

4.3.1.E Cash flow hedges

4.3.2 Corporate assets

4.4 Estimating the future pre-tax cash flows of the CGU under review

4.4.1 Budgets and cash flows

4.4.1.A Cash inflows and outflows from improvements and enhancements

4.4.1.B Restructuring

4.4.1.C Terminal values

4.4.1.D Foreign currency cash flows

4.4.1.E Internal transfer ...