Impairment of long-lived assets (ASPE)

Question 1

Impairment of long-lived assets (ASPE)

Answer 1

• Steps:
  1. Determine if factors indicating impairment exist
  2. Group asset with other assets/liabilities to form group at the lowest level that generates cash flow (i.e. cash generating unit)
  3. Determine if there is impairment by comparing net book value to recoverable amount (i.e. undiscounted future cash flows)
  4. Calculate impairment by comparing carrying amount to fair value
• Cannot reverse write-downs

Reference: ASPE 3063.04-.09, .12, .18