IAS 36 Impairment of Assets
Compare carrying amount with recoverable amount, the higher of value in use and fair value less costs of disposal. Test an individual asset or its cash-generating unit as appropriate, and follow mandatory annual testing requirements for specified assets such as goodwill. Allocate CGU losses under IAS 36. Reversals are limited to the carrying amount that would have existed without impairment; impairment of goodwill is not reversed.
Worked example
A machine has carrying amount $100,000 and recoverable amount $85,000. Subject to applicable presentation rules, recognise a $15,000 impairment loss.
Common mistake
Using the lower of value in use and fair value less disposal costs, or reversing a past impairment loss on goodwill.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Direct | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |