IAS 36Chapter 3Lesson 1
When to test? Every reporting date and every year
Step 1 of 9Learning objectives
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IAS 36 does not require recoverable amount to be calculated for every asset at every reporting date. It sets two triggers: looking for indicators of impairment at each reporting date, for all assets, and an annual test, even with no indicator, for three categories of assets (intangibles with an indefinite useful life, intangibles not yet available for use and goodwill), on a chosen and stable date.
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Learning objectives
- Explain why the entity looks for indicators at each reporting date rather than testing everything.
- Determine that, when an indicator exists, recoverable amount must be estimated.
- Identify the three categories of assets tested every year even with no indicator.
- Set the date of the annual test and deal with an asset recognised during the year.