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IAS 36Workpapers (Step 4 of 5)

Workpaper template

Step 4 of 5
WorkpaperIAS 36 — Impairment of AssetsL1 · L2 · L3

Review of indications of impairment and reversal

4 missions9 sections to document30 min
Prepared by
AI-assisted draft
Reviewed by
Not reviewed — human review required
Status
Published

Objective of the workpaper

At each reporting date, list the assets subject to a mandatory annual test, examine the external and internal indications of impairment (and of reversal for assets already impaired), assess their materiality in the light of prior calculations and conclude, asset by asset or unit by unit, on whether the recoverable amount must be estimated.

9 sections · 19 blocks · 0 calculations · 0 entries

  • IAS 36 §8
  • IAS 36 §9
  • IAS 36 §10
  • IAS 36 §11
  • IAS 36 §12
  • IAS 36 §13
  • IAS 36 §14
  • IAS 36 §15
  • IAS 36 §16
  • IAS 36 §17
  • IAS 36 §110
  • IAS 36 §111
  • IAS 36 §112
  • IAS 36 §113

Work this workpaper as a mission

Each case that uses this template opens in the mission workspace: data, analysis, calculation, entries, conclusion and review, with your progress saved.

4 instances from the cases: the calculations and entries below are run by the calculation engine.

File and entity
Injection press: indications, recoverable amount and revised depreciation
Case task documented here
  • Is there an indication of impairment at 31 December 20X4? What must you do?
1

Inputs

Inputs

  • Asset or cash-generating unit reviewed (nature, unit it belongs to, impairment history)

    TextRequired

  • Reporting date of the review

    DateRequired

    20X4-12-31

  • Carrying amount of the asset or unit at the review date

    NumberRequired

    540,000

  • Recoverable amount from the most recent detailed calculation (if any)

    Number

  • Prior impairment losses not reversed (other than goodwill)

    Number

  • Market capitalisation of the entity (if listed)

    Number

  • Carrying amount of the net assets of the entity

    Number

  • Internal reporting evidence (budgets, actual results, cash needs)

    Text

2

Supporting evidence

Evidence

  • Evidence obtained and referenced (category, document reference)

    EvidenceRequired

3

Mandatory annual tests

Analysis

IAS 36 §10IAS 36 §11

  • Assets tested every year even without an indication

    ChecklistRequired

    • Intangible asset with an indefinite useful life
    • Intangible asset not yet available for use
    • Goodwill acquired in a business combination
    • Test performed at the same time every year (before year-end for an asset recognised in the period)
4

Indications of impairment

Analysis

IAS 36 §8IAS 36 §9IAS 36 §12IAS 36 §13IAS 36 §14

  • External sources considered

    ChecklistRequired

    • Significant and unexpected decline in the market value of the asset
    • Adverse change in the technological, economic, legal or market environment
    • Increase in market interest rates or rates of return
    • Carrying amount of net assets above market capitalisation
    • Investment: dividend accompanied by indications of impairment

  • Internal sources considered

    ChecklistRequired

    • Obsolescence or physical damage of the asset
    • Adverse change in use (idle asset, restructuring, early disposal plans)
    • Economic performance worse than expected according to internal reporting

  • Other indications identified by the entity (the list is not exhaustive)

    Checklist

    • Other indication documented
5

Materiality and consequences

Analysis

IAS 36 §15IAS 36 §16IAS 36 §17

  • Materiality analysis of the indication

    Checklist

    • Significant headroom in the last calculation and no event has eliminated it
    • Recoverable amount shown not to be sensitive to the indication
    • Rate increase unlikely to affect the discount rate or to cause a material loss
    • Useful life, depreciation method and residual value reviewed
6

Indications of reversal

Analysis

IAS 36 §110IAS 36 §111IAS 36 §112IAS 36 §113

  • Indications that a prior loss (other than goodwill) has decreased or no longer exists

    Checklist

    • Observable indications of a significant increase in the asset's value
    • Favourable change in the technological, market, economic or legal environment
    • Decrease in market rates affecting the discount rate
    • Favourable change in use (enhancement expenditure, restructuring)
    • Internal reporting showing better performance than expected
    • Life, depreciation method and residual value reviewed even without a reversal
7

Whether the recoverable amount must be estimated

Judgment

IAS 36 §9IAS 36 §10IAS 36 §15IAS 36 §110

  • Conclusion on estimating the recoverable amount

    JudgmentRequired

    Indication identified or mandatory annual test: estimate the recoverable amount

    Indication identified or mandatory annual test: estimate the recoverable amount / Indication shown to have no material effect: no new estimate / No indication and no annual test required

    The review of indications does not require estimating the recoverable amount of every asset: only when there is an indication or for the mandatory annual tests (paras. 9 and 10).

  • Rationale: facts relied on, analysis, alternative rejected

    TextRequired

8

Conclusion

Conclusion

  • Reasoned conclusion: whether the recoverable amount is estimated, and follow-up actions

    ConclusionRequired

9

Normative references

References

  • Paragraphs cited in this workpaper (verification status shown from the register)

    References

10

Checks and financial statement impact

  • The conclusion on indications is documentedPass
  • The carrying amount reviewed is documentedPass
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Liabilities
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Profit or loss
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OCI
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Equity
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