IAS 36Chapter 3Lesson 2
Indicators of impairment and their materiality
Step 1 of 10Learning objectives
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The signals that require recoverable amount to be estimated: external indicators (market, environment, rates, market capitalisation), internal indicators (obsolescence, damage, change in use, performance) and dividends received from subsidiaries, associates or joint ventures. The lesson also shows when an indicator does not require a new calculation (materiality, sensitivity) and why an indicator may lead to a review of useful life, depreciation method or residual value even with no loss.
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Learning objectives
- Recognise external and internal indicators of impairment, and the indicator specific to dividends from investments.
- Analyse a real situation, including internal reporting and signals missing from the list, to conclude whether an indicator exists.
- Assess, using materiality and earlier calculations, whether an indicator requires a new formal estimate.
- Review useful life, depreciation method or residual value when an indicator exists, even with no loss.