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Dear Mike,
Lec notes page 142:
IAS 38 Amortisation and disclosure
• amortise on a systematic basis over anticipated useful life
• usually not more than twenty years
• commence amortisation when asset is available for use
• amortisation period and method should be reviewed at least annually
• recoverable amount reviewed annually and impaired as necessaryWhat does “recoverable amount reviewed annually and impaired as necessary” mean?
‘What does “recoverable amount reviewed annually and impaired as necessary” mean?’
OH DEAR!!!!!
Recoverable amount is the higher of value in use and net realisable value
This comparison should be reviewed annually
If, on one of these annual reviews, it appears that recoverable amount is impaired, then we should account for it as an impairment
Come on!
The words tell it as it is – it surely cannot need to be explained
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