CERTYNEX IFRS ACADEMY

The Vireo chain closes one of its leased stores, whose lease still runs for 4 years, and identifies an indication of impairment of the related right-of-use asset. What must it do?

Reduce the lease liability by the expected loss.

Apply IAS 36 to the right-of-use asset and recognise any impairment loss.

Wait for the end of the lease: a right-of-use asset is not impaired before its term.

Revalue the right-of-use asset to fair value, with the difference going to equity.