International Accounting Standard 36
The International Accounting Standard 36 (short IAS 36 ) is a standard regulation for the accounting of the International Accounting Standards Board (IASB) for the impairment of the fixed assets of companies.
definition
An impairment under IAS 36 is concluded when the book value is higher than the in the market obtainable market value or the value in use resulting cash flow ( English value in use ). The IAS impairment corresponds to the extraordinary depreciation according to German commercial law . A distinction must be made between the depreciation and the depreciation for wear and tear according to tax law, which in each case prescribe a typical loss in value over a fictitious useful life .
application
IAS 36 records impairments, i.e. values below the book value of the
- Goodwill (goodwill)
- other intangible assets
- Property, plant and equipment
The standard does not apply to impairment of current assets , for example
- Inventories ( IAS 2 )
- Valuables arising from construction contracts ( IAS 11 )
- deferred tax assets ( IAS 12 )
- Assets for future employee benefits ( IAS 19 )
- Biological assets related to an agricultural activity ( IAS 41 ).
test
If the suspicion of impairment exists, the company needs at the balance sheet date for impairment perform (impairment test).
Company-internal (obsolescence, damage cases) or external indicators (stock exchange price, market conditions, interest rate development) serve as a guide.
The recoverable amount
The recoverable amount is the higher of the net selling price and the value in use .
- Net selling price = market value less selling costs; The market value is the value that comes about in a transaction under market conditions between knowledgeable, willing partners.
- Value in use = present value of the future payments from the use of the asset plus realizable value
If the values cannot be determined exactly, estimates and averages are allowed.
Goodwill impairment
A Goodwill arises on acquisitions and is the difference between the purchase price and the intrinsic value of an operation. This goodwill must be checked for impairment at least once a year. ( Impairment test )
Posting the depreciation
The impairment is to be recorded as an expense in the income statement . It is also possible to continue the asset value at the revaluation amount. In this case, the impairment loss must be booked as a revaluation reserve.
If it is not possible to assign the recoverable amount to an asset, several assets must be combined to form a cash-generating unit . (CGU = cash generating unit)
Write-ups
On each balance sheet date, a check should be carried out to determine whether the reasons for the impairment still exist. However, the impairment loss is only to be reversed if there have been changes in the estimates that were used to determine the recoverable amount. In this case the book value must be increased to the recoverable amount.
The increased amount may not, however, exceed the original book value less scheduled depreciation.
Web links
- Overview of IAS 36 on IAS Plus from Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft
See also
- List of International Financial Reporting Standards
- US GAAP - FASB accounting rules
- German Accounting Standards Committee