Impairment (F3:M8)

Question 1

how to test for impairment of intangible/PPE asset with a finite life (possible to estimate useful life of asset)

Answer 1

carrying amount > undiscounted future cash flows =
impairment
^called the recoverability test

impairment loss = carrying amount - FV of asset or PV of future cash flows

Question 2

how to test for impairment of intangible asset with an indefinite life

Answer 2

carrying amount - FV of asset = impairment loss

Question 3

what does IFRS allow that GAAP does not?

Answer 3

the reversal of impairment losses

*GAAP does allow if asset is held for disposal

Question 4

if an asset held for disposal is impaired, how is total impairment loss calculated?

Answer 4

impairment loss + cost of disposal

Question 5

under IFRS, how is impairment loss calculated?

Answer 5

carrying value less the greater of:

FV of asset - cost to sell
or
PV of future cash flows