IAS 36Chapter 6Lesson 1
Recognising an impairment loss
Step 1 of 8Learning objectives
Go deeper+1 deeper insight · +2 calculations · +1 journal entry · +1 point of attention
Once the recoverable amount is known, the test still has to be translated into the accounts: write the asset down to its recoverable amount, recognise the loss in profit or loss (or first in other comprehensive income for a revalued asset), create no liability unless another standard requires one, then recalculate the depreciation of later periods and the deferred tax.
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Learning objectives
- Calculate the impairment loss of an individual asset as the excess of its carrying amount over its recoverable amount.
- Recognise the loss in profit or loss for an asset carried at cost, and in other comprehensive income then profit or loss for a revalued asset.
- Know that a loss greater than the carrying amount creates a liability only if another standard requires it.
- Recalculate the depreciation of later periods and explain the effect of the loss on deferred tax.