Objective of the standard

Learning objectives

• Explain the objective of IAS 36: no asset is carried in the statement of financial position at more than the amount to be recovered through its use or sale.L1

Normative references

• IAS 36 §1Sets the objective of the Standard: to ensure that no asset is carried in the statement of financial position at more than the amount to be recovered through its use or sale, and to specify when an impairment loss is recognised, when it is reversed and which disclosures are required.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

8 questions

• True or false? IAS 36 aims to ensure that no asset is shown in the statement of financial position at more than the amount the entity will recover from it, through use or through sale.L1
• True or false? The objective of IAS 36 is to require all assets to be remeasured at fair value at each reporting date.L1
• A trainee auditor asks what IAS 36 is for on the balance sheet. Which answer should they be given?L1
• True or false? In addition to recognising impairment losses, IAS 36 specifies when an impairment loss must be reversed.L1
• Which of the following matters is NOT part of what the objective of IAS 36 announces?L1
• True or false? As long as management intends to keep using an asset, IAS 36 allows it to remain in the statement of financial position at more than its use and sale would allow the entity to recover.L1
• According to the objective of IAS 36, through which routes can the entity recover the amount of an asset?L1
• Valtorre Ltd holds a press carried at EUR 500,000. Analyses show that it will at best recover EUR 380,000, through use or through sale. Which statement is consistent with the objective of IAS 36?L1