CERTYNEX IFRS ACADEMY

A cold-storage warehouse owned by Lunaria was severely damaged by fire in October 20X1. At the year-end, the accountant writes the analysis below. Which step contains the error?

Step 1: the entity looks for indications of impairment from external and internal sources of information.

Step 2: the market value of comparable warehouses in the region has not declined.

Step 3: since market value has not declined, there is no indication of impairment.

Step 4: the analysis is documented in the year-end file.