IFRS

Question 1

Impairment of I/A other than Goodwill

Answer 1

1 step model:

*carrying value is compared to recoverable amount

*recoverable amount =
> of assets FV less costs to sell and assets value in use

• Value in use = PV of future cash flows expected
• loss recognized to extent carrying value exceeds recoverable amount
• reversal permitted

DO NOT BE FOOLED AND ASSUME LOWER WITH REGARD TO RECOVERABLE AMOUNT BUT GREATER IS WHAT IS USED

Question 2

Executory Costs in Lease under IFRS

Answer 2

Initial direct costs of lease paid by lessee are added to the amount recognized as a finance lease ASSET.

The amount of lease asset & lease obligation can differ.