The document discusses impairment testing under International Financial Reporting Standards (IFRS). It provides guidance on key aspects of impairment testing, including:
1. IAS 36 requires impairment testing when there are indicators an asset may be impaired and annually for goodwill and indefinite-lived intangible assets. Testing involves comparing an asset's carrying amount to its recoverable amount, defined as the higher of fair value less costs to sell or value in use.
2. Identifying a cash-generating unit for impairment testing requires judgment. A cash-generating unit is the smallest group of assets that generates largely independent cash inflows. Goodwill is allocated to cash-generating units expected to benefit from synergies.
3.
Financial accounting icab chapter 9 provisions, contingencies and events after the balance sheet date
Financial accounting icab chapter 9 provisions, contingencies and events after the balance sheet date
Financial accounting, icab ,chapter 9 ,provisions, contingencies ,and events after the balance sheet date
Etude sur la justice fiscale et la mobilisation des ressources GBO
Le présent rapport a été préparé par une équipe composée par
Mohamed HADDAR, Président de l’ASECTU et Mustapha
BOUZAIENE, Statisticien-Economiste.
Durant la préparation de ce rapport, l’équipe a bénéficié de l’aimable coopération de différents services de l’administration tunisienne qu’elle tient ici à remercier, aussi bien pour l’appui en termes de facilité dans la mobilisation de
certaines informations statistiques, que pour les échanges et
discussions effectués. L’équipe a également bénéficié des rencontres réalisées avec plusieurs différents opérateurs et intervenants de la scène économique et politique.
Tout particulièrement, l’équipe exprime des remerciements à Mme Lamia ZRIBI, ancien ministre des finances, Mr Mustapha K. Nabli, ancien gouverneur de la Banque Centrale de Tunisie et Mr Hédi Larbi, ancien ministre de l’équipement, de l’aménagement du territoire et de l’habitat pour avoir accepté de consacrer du temps à la discussion avec l’équipe chargée de préparer le rapport et pour avoir commenté diverses versions du rapport.
Financial accounting icab chapter 9 provisions, contingencies and events after the balance sheet date
Financial accounting icab chapter 9 provisions, contingencies and events after the balance sheet date
Financial accounting, icab ,chapter 9 ,provisions, contingencies ,and events after the balance sheet date
Etude sur la justice fiscale et la mobilisation des ressources GBO
Le présent rapport a été préparé par une équipe composée par
Mohamed HADDAR, Président de l’ASECTU et Mustapha
BOUZAIENE, Statisticien-Economiste.
Durant la préparation de ce rapport, l’équipe a bénéficié de l’aimable coopération de différents services de l’administration tunisienne qu’elle tient ici à remercier, aussi bien pour l’appui en termes de facilité dans la mobilisation de
certaines informations statistiques, que pour les échanges et
discussions effectués. L’équipe a également bénéficié des rencontres réalisées avec plusieurs différents opérateurs et intervenants de la scène économique et politique.
Tout particulièrement, l’équipe exprime des remerciements à Mme Lamia ZRIBI, ancien ministre des finances, Mr Mustapha K. Nabli, ancien gouverneur de la Banque Centrale de Tunisie et Mr Hédi Larbi, ancien ministre de l’équipement, de l’aménagement du territoire et de l’habitat pour avoir accepté de consacrer du temps à la discussion avec l’équipe chargée de préparer le rapport et pour avoir commenté diverses versions du rapport.
Accounting Standards for Government Entities other than Government Business Enterprises (GBEs). This accounting standard is international standard for Governments, Government Autonomous bodies, Government Financial Institutions (not commercial entities). IFRS is international standard for Corporates, which is applicable to Government Business Enterprises. Different nations have adopted and adapted the IPSAS, Cash or Accrual or modified Cash IPSAS. Governments has named the standards by the name of respective Governments. The presentation covers IPSAS 1: Presentation of Financial Statement
IPSAS 2: Cash Flow Statement
IPSAS 3: Accounting Policies, Changes in Accounting Estimates & Errors
IPSAS 4: Changes in Forex Rate
IPSAS 5: Borrowing Cost
IPSAS 6: Consolidated and separate FS
IPSAS 7: Investments in Associates
IPSAS 8: Interest in Joint Venture
IPSAS 9: Revenue from Exchange Transactions
IPSAS 10: Financial Reporting in Hyperinflationary Economies
IPSAS 11: Construction Contract
IPSAS 12: Inventories
IPSAS 13: Leases
IPSAS 14: Events after the Reporting Date
IPSAS 16: Investment Property
IPSAS 17: Property, plant & Equipment
IPSAS 18: Segment Reporting
IPSAS19: Provisions Contingent Liabilities & Assets
IPSAS 20: Related Party disclosures
IPSAS 21: Impairment of Non-Cash Generating Asset
IPSAS 22: Disclosure of Financial Information About the General Government Sector
IPSAS 23: Revenue from Non-Exchange Transactions(Tax & Transfer)
IPSAS 24: Presentation of Budget information in FS
IPSAS 25: Employee Benefits
IPSAS 26: Impairment of Cash Generating Asset
IPSAS 27: Agriculture
IPSAS 28: Financial Instrument Presentation
IPSAS 29: FI: Recognition & Measurement
IPSAS 30: Financial Instrument Disclosure
IPSAS 31: Intangible Asset
IPSAS 32: Service Concession Arrangements: Grantor
Accounting Standards for Government Entities other than Government Business Enterprises (GBEs). This accounting standard is international standard for Governments, Government Autonomous bodies, Government Financial Institutions (not commercial entities). IFRS is international standard for Corporates, which is applicable to Government Business Enterprises. Different nations have adopted and adapted the IPSAS, Cash or Accrual or modified Cash IPSAS. Governments has named the standards by the name of respective Governments. The presentation covers IPSAS 1: Presentation of Financial Statement
IPSAS 2: Cash Flow Statement
IPSAS 3: Accounting Policies, Changes in Accounting Estimates & Errors
IPSAS 4: Changes in Forex Rate
IPSAS 5: Borrowing Cost
IPSAS 6: Consolidated and separate FS
IPSAS 7: Investments in Associates
IPSAS 8: Interest in Joint Venture
IPSAS 9: Revenue from Exchange Transactions
IPSAS 10: Financial Reporting in Hyperinflationary Economies
IPSAS 11: Construction Contract
IPSAS 12: Inventories
IPSAS 13: Leases
IPSAS 14: Events after the Reporting Date
IPSAS 16: Investment Property
IPSAS 17: Property, plant & Equipment
IPSAS 18: Segment Reporting
IPSAS19: Provisions Contingent Liabilities & Assets
IPSAS 20: Related Party disclosures
IPSAS 21: Impairment of Non-Cash Generating Asset
IPSAS 22: Disclosure of Financial Information About the General Government Sector
IPSAS 23: Revenue from Non-Exchange Transactions(Tax & Transfer)
IPSAS 24: Presentation of Budget information in FS
IPSAS 25: Employee Benefits
IPSAS 26: Impairment of Cash Generating Asset
IPSAS 27: Agriculture
IPSAS 28: Financial Instrument Presentation
IPSAS 29: FI: Recognition & Measurement
IPSAS 30: Financial Instrument Disclosure
IPSAS 31: Intangible Asset
IPSAS 32: Service Concession Arrangements: Grantor
Per què necessitem una reforma de la protecció de dades a la UE?Privadesa
Les propostes estan pensades per garantir que la seva informació personal estigui protegida -independentment del lloc on s'enviï o en què s'emmagatzemi- fins i tot fora de la UE, com passa sovint a Internet.
Evaluation of Capital Needs in Insurancekylemrotek
Presentation on capital adequacy analysis for property casualty insurance companies, as presented to Milliman\'s 2008 Casualty Consultants Forum in Denver
Mercer Capital's Portfolio Valuation: Private Equity and Venture Capital Mark...Mercer Capital
Mercer Capital's Portfolio Valuation: Private Equity and Venture Capital Marks and Trends Newsletter provides a brief digest and commentary of some of the most relevant market trends influencing the fair value regarding private equity portfolio investments.
Audit of Internal Financial Control over Financial Reporting (IFCR) A complet...Taufir Alam
Introduction to the Presentation on internal financial control over financial reporting_a complete guide
The Companies Act, 2013 has introduced some new requirements relating to audits and reporting by the statutory auditors of companies.
One of these requirements is given under Section 143(3)(i) of the Act which requires the statutory auditor to state in his audit report whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
The section has cast onerous responsibilities on the statutory auditors because reporting on internal financial controls is not covered under the Standards on Auditing issued by the ICAI.
Since the concept of reporting on internal financial controls is still new in India this new reporting requirement has thrown up many challenges for the members.
To help the members properly understand and perform the various aspects of this reporting responsibility, the Auditing and Assurance Standards Board of the Institute of Chartered Accountants of India has brought out this Guidance Note on Audit of Internal Financial Controls Over Financial Reporting.
The Guidance Note covers aspects such as Scope of reporting on internal financial controls under Companies Act 2013, essential components of internal controls, Technical guidance on the audit of Internal Financial Controls, Implementation guidance on the audit of Internal Financial Controls.
I have presented the above guidance note into a presentation that will have a complete guide for those who are planning to go for Audit of Internal financial control over financial reporting. this presentation will cover all the relevant aspects and also provide the standard operation process for the efficient conduct of the IFCR Audit. You don't need to read the complete Guidance note.
The implementation of the MAR in 2010 will
provide a valuable opportunity for insurers
to assess the effectiveness of their internal
controls and the accuracy of their financial
reporting. Insurers must promptly develop a
strategy for compliance with the MAR if they
have not done so already. A set of corporate
norms for complying with the new MAR
has yet to develop, but actuaries have the
knowledge and skills to assist in many aspects
of the process and can help determine the set
of best practices moving forward.
Some critical issues does pop up while the issue of accounting treatment of Future Warranty Claims comes. In fact here the Financial reporting in India is undergoing a drastic transformation owing to the adoption of Indian Accounting Standards (Ind AS) that are converged with IFRSs. Thus
the key issues on Recognition, Measurement and Disclosure requirements for various items are undergoing significant changes in recent past. In the light of above it is important to consider the change in recognition, measurement and disclosure requirements in respect of provisions
carried in the books with respect to warranties offered by Companies.
Snapshot Accounting for the impairment of goodwill and othe.docxwhitneyleman54422
Snapshot: Accounting for the impairment
of goodwill and other long-lived assets
December 2012
Accounting for the impairment of goodwill and other long-lived assets is complex because there are different models depending
on the type of asset involved. Each model uses a different unit of account and each has a different impairment recognition
threshold. The frequency with which impairment must be assessed and the basis used to measure an impairment charge varies
across some of these models. To help with this complexity, we have prepared a snapshot of the relevant accounting guidance in
the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC). Additional explanations for certain
concepts in the snapshot are provided in the numbered notes that follow it.
Indefinite-lived
intangible assets
Long-lived assets to be
held and used1
Goodwill
Long-lived assets to be
disposed of by sale
Codification topic ASC 350 ASC 360 ASC 350 ASC 360
Frequency Annual test is required,
and interim test is
necessary if triggers
are present
Test is required only if
triggers are present
Annual test is required,
and interim test is
necessary if triggers
are present
Test is required if held-for-
sale criteria are met
Unit of account In general,
individual asset 2
Asset group 3 Reporting unit 4 Individual asset to be
disposed of or a group
of assets to be disposed
of (i.e., disposal group)
Evaluated for
impairment before unit
of account
Not applicable Indefinite-lived
intangible assets and
other assets within the
asset group 5
Indefinite-lived
intangible assets,
long-lived assets to
be held and used and
other assets within the
reporting unit 5
Indefinite-lived
intangible assets,
goodwill and other
assets within the
disposal group 5
Single- or
multi-step test
Single-step 6 Multi-step Multi-step Single-step
Impairment
recognition
When the carrying
amount is greater than
fair value 6
When the carrying
amount is greater than
both the undiscounted
cash flows (recoverability
test) and fair value 7,8
When the carrying
amount of the reporting
unit (unless the carrying
amount is zero or
negative) is greater than
its fair value (Step 1) and
the carrying amount of
goodwill is greater than
its implied fair value
(Step 2) 9-11
When the carrying
amount is greater
than fair value less
costs to sell
Measurement The excess of the carrying
amount over fair value
The excess of the carrying
amount over fair value 8,12
The excess of the carrying
amount of goodwill over
its implied fair value 10
The excess of the
carrying amount
over fair value less
costs to sell
Assurance
Services
1. The types of assets covered by the caption “long-lived
assets to be held and used” include those long-lived assets
within the scope of ASC 360-10-15, such as property, plant
and equipment, assets under capital leases, amortizable
intangible assets, internal use.
For more course tutorials visit
www.newtonhelp.com
1.Developing an understanding of the client's business and industry is essential to proficiency as discussed in the general standards of GAAS. (Points: 4)
The Impact of Recent Supervisory Guidance on Capital Planning by Kosoff and B...Jacob Kosoff
The Federal Reserve has tailored capital planning management expectations in certain areas for financial institutions with assets between $50bn and $250bn, while the Federal Reserve has heightened expectations in other areas including ongoing monitoring, firm-wide sensitivity analysis, change management, internal controls and board reporting. Written by Jacob Kosoff and Rachel Bryant.
Pytheas Asset Management is a leading asset manager for institutions, individuals and financial intermediaries, worldwide. We focus on global, regional, developed, and emerging markets, plus a number of specialty products, including country and sector funds. Our investments combine local resources with access to global strategies and networks, and we continue to offer new products in response to an evolving global market and our clients' evolving needs.
In keeping with the organization's "all-around relationship" approach, our risk management professionals cooperate intimately with the asset management, investment banking, industry experts and regional specialists to design risk management solutions that are most appropriate and effective given industry characteristics and geographic constraints and imperatives.
This presentation brief highlights the continued evolution and strategic importance of the risk function for asset management companies.
Usse average internal rate of return (airr), don't use internal rate of retur...Futurum2
This is to document the email correspondences with Prof. Peter M. DeMarzo (Stanford University) and Prof. Carlo Alberto Magni with regards to Average Internal Rate of Return in Dec 2015.
Use average internal rate of return (airr), don't use internal rate of return...Futurum2
This is to document email correspondence with Prof. Carlo Alberto Magni with regards to the use of Average Internal Rate of Return (AIRR) instead of Internal Rate of Return (IRR)
A quick comment on pablo fernandez' article capm an absurd model draftFuturum2
This is to document email correspondence with Prof. Peter M. DeMarzo (Stanford University, USA) and Ignacio Velez-Pareja (Columbia) with regards to the article by Pablo Fernandez posted at SSRN.com under the title "CAPM: An Absurd Model"
Summing up about growing and non growing perpetuities wacc levered and tax sa...Futurum2
In this note we reconsider in detail the proper discount rate for cash flows in perpetuity, the present value of tax savings and the calculation of terminal value. The note clarifies the use of real discount rates and concludes with a formulation that is inflation-neutral for a given assumption on the discount rate for the tax savings. We find that the only discount rate for tax savings that makes the value of the perpetuity inflation-neutral is Kd, the cost of debt. We also reconsider the intuitive approach to calculate the cost of capital for perpetuities from the nominal rates that compose that cost of capital, and then
converting it into real cost of capital using Fisher relationship.
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
Poonawalla Fincorp and IndusInd Bank Introduce New Co-Branded Credit Cardnickysharmasucks
The unveiling of the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card marks a notable milestone in the Indian financial landscape, showcasing a successful partnership between two leading institutions, Poonawalla Fincorp and IndusInd Bank. This co-branded credit card not only offers users a plethora of benefits but also reflects a commitment to innovation and adaptation. With a focus on providing value-driven and customer-centric solutions, this launch represents more than just a new product—it signifies a step towards redefining the banking experience for millions. Promising convenience, rewards, and a touch of luxury in everyday financial transactions, this collaboration aims to cater to the evolving needs of customers and set new standards in the industry.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
1. www.futurumcorfinan.com
Page 1
Impairment Testing
Impairment Testing under IFRS
Impairment testing under International Financial Reporting Standards could be framed out
as follows:
Note: IAS 39 and IFRS 9 Financial Instruments.
Sukarnen
DILARANG MENG-COPY, MENYALIN,
ATAU MENDISTRIBUSIKAN
SEBAGIAN ATAU SELURUH TULISAN
INI TANPA PERSETUJUAN TERTULIS
DARI PENULIS
Untuk pertanyaan atau komentar bisa
diposting melalui website
www.futurumcorfinan.com
2. www.futurumcorfinan.com
Page 2
International Accounting Standards 36 on Impairment on Assets sets out the requirements
for testing assets for impairment. Although the overarching principle in the standard is
straightforward, that is the assets should not be carried at above their recoverable amount, it
is in the application of it often proves challenging because of the judgements and
estimates required.
IAS 1 on Presentation of Financial Statements emphasizes the importance of disclosing the
judgements and estimations in the preparation of financial statements.
IAS 1.122
An entity shall disclose, in the summary of significant accounting policies or another notes,
the judgements, apart from those involving estimations, that management has made in the
process of applying the entity’s accounting policies and that have the most significant effect
on the amounts recognized in the financial statements.
IAS 1.125
An entity shall disclose information about the assumptions it makes about the future, and
other major sources of estimation uncertainty at the end of the reporting period, that have a
significant risk of resulting in a material adjustment to the carrying amounts of assets and
liabilities within the next financial year. In respect of those assets and liabilities, the notes
shall include details of:
(a) Their nature, and
(b) Their carrying amount as at the end of the reporting period.
IAS 1.126
Determining the carrying amounts of some assets and liabilities requires estimation of the
effects of uncertain future events on those assets and liabilities at the end of the reporting
period. For example, in the absence of recently observed market prices, future-oriented
estimates are necessary to measure the recoverable amount of classes of property, plant
and equipment, the effect of technological obsolescence on inventories, provisions subject
to the future outcome of litigation in progress, and long-term employee benefit liabilities such
as pension obligations. These estimates involve assumptions about such items as the risk
adjustment to cash flows or discount rates, future changes in salaries and future changes in
prices affecting other costs.
IAS 1.127
The assumptions and other sources of estimation uncertainty disclosed in accordance with
paragraph 125 above relate to the estimates that require management’s most difficult,
subjective or complex judgements. As the number of variables and assumptions affecting
the possible future resolution of the uncertainties increases, those judgements become more
3. www.futurumcorfinan.com
Page 3
subjective and complex, and the potential for a consequential material adjustment to the
carrying amounts of assets and liabilities normally increases accordingly.
IAS 1.129
An entity presents the disclosures in paragraph 125 [above] in a manner that helps users of
financial statements to understand the judgements that management makes about the future
and about other sources of estimation uncertainty. The nature and extent of the information
provided vary according to the nature of the assumption and other circumstances. Examples
of the types of disclosures an entity makes are
(a) the nature of the assumption or other estimation uncertainty;
(b) the sensitivity of carrying amounts to the methods, assumptions and estimates
underlying their calculation, including the reasons for the sensitivity;
(c) the expected resolution of an uncertainty and the range of reasonably possible
outcomes within the next financial year in respect of the carrying amounts of the
assets and liabilities affected; and
(d) an explanation of changes made to past assumptions concerning those assets and
liabilities, if the uncertainty remains unresolved.
In addition to the application of judgements and estimations in IAS 36, the frequency of
impairment testing is a challenge as well for the preparers of the financial statements.
IAS 36 requires the recoverable amount of an asset to be measured whenever there is an
indication that the asset may be impaired, yet the standards do not stop there, since the
standards also requires:
(a) the recoverable amount of an intangible asset with an indefinite useful life to be
measured annually, irrespective of whether there is an indication that it may be
impaired. The most recent detailed calculation of recoverable amount made in a
preceding period may be used in the impairment test for that asset in the current
period, provided specified criteria are met.
(b) the recoverable amount of an intangible asset not yet available for use to be measured
annually, irrespective of whether there is any indication that it may be impaired.
(c) goodwill acquired in a business combination to be tested for impairment annually.
IASC acknowledged that an enterprise would use judgement in determining whether an
impairment loss needed to be recognized. For this reason, IAS 36 included some
safeguards to limit the risk that an enterprise may make an over-optimistic (pessimistic)
estimate of recoverable amount:
(a) IAS 36 requires a formal estimate of recoverable amount whenever there is an
indication that:
(i) an asset may be impaired; or
4. www.futurumcorfinan.com
Page 4
(ii) an impairment loss may no longer exist or may have decreased.
For this purpose, IAS 36 includes a relatively detailed although not exhaustive list of
indicators that an asset may be impaired.
(b) IAS 36 provides guidelines for the basis of management’s projections of future cash
flows to be used to estimate value in use.
IAS 36 provides guidance on impairment testing, which is summarized as follows:
an entity shall assess at the end of each reporting period whether there is any
indication that an asset may be impaired. If any such indication exists, the entity shall
estimate the recoverable amount of the asset.
Impairment testing will involve comparing the carrying amount of that asset with is
recoverable amount. The recoverable amount of an asset or a cash-generating unit
is determined to be the higher of its fair value less costs to sell and its value in use.
If the asset is impaired, the entity must write it down to its recoverable amount and
recognize an impairment loss in the statement of comprehensive income. The only
exception is if the impaired asset is a revalued asset. In this case, the value changes
are recognized directly in equity to the extent that a revaluation surplus for that asset
exists in equity.
For an entity that has goodwill and indefinite lived intangible assets, a mandatory
impairment test must be performed on these assets annually. The impairment test
can be performed at any time during the period, provided it is performed at the same
time each year. Goodwill and indefinite lived intangible assets must also be tested for
impairment when impairment indicators exist.
IAS 36 provides a list of external and internal sources of information that could be indicators
of impairment. Minimum, there are seven sources of information that an entity should
consider.
1. during the period, there is a significant decline in an asset’s market value not
resulting from the passage of time or normal use.
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2. during the period, or in near future, there are significant changes in the technological,
market, economic or legal environment in which the entity operates or in the market
to which an asset is dedicated with an adverse effect to the entity.
3. During the period, there is an increase in the market interest rates impacting the
discount rate used in calculating an asset’s value in use, resulting in the material
decrease in the asset’s recoverable amount.
4. Market cap of the net assets of the entity is lower than their carrying amount.
5. There is evidence for obsolescence or physical damage of an asset.
6. During the period or in near future, significant changes with adverse effect on the
asset value. These changes among others include the asset becoming idle, plans to
discontinue or restructure the operation to which an asset belongs, plans to dispose
of an asset before the previously expected date, and reassessing the useful life of an
asset as finite rather than indefinite.
7. Expected economic performance of an asset is worsening.
All in all, to test an asset for impairment, the recoverable amount of the asset needs to be
measured.
As defined above, the recoverable amount will involve the determination of:
fair value less costs to sell and
value in use
Both items in the recoverable amount is given further definition in the standards, however,
the application of that definition will necessitate the preparers of the financial statements to
use valuation specialists on their staff or hire outside consultants to provide the
measurements.
Both items are defined as follows:
Fair value less costs to sell is the amount obtainable from the sale of an asset or
cash-generating unit in an arm’s length transaction between knowledgeable, willing
parties, less the costs of disposal.
Value in use is the present value of the future cash flows expected to be derived from
an asset or cash-generating unit.
Another issue that complicates the application of impairment testing is that most assets in a
business typically generate cash inflows by working together as a group of assets rather
than generating assets individually. As such, it is often impossible to measure the value in
use for an individual asset. This means that unless the fair value less costs to sell of an
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asset is greater than its carrying amount, the asset must generally be tested for impairment
as part of the value in use of the cash generating unit to which it belongs.
Then the next question is what is a cash-generating unit? Definitely, we can not see cash-
generating unit on the balance sheet or statement of the financial position. However, IAS 36
said that a cash-generating unit is the smallest identifiable group of assets that generates
cash inflows that are largely independent of the cash inflows from other assets or group of
assets. Identification of an asset’s cash-generating unit will involve judgement. If recoverable
amount cannot be determined for an individual asset, an entity identifies the lowest
aggregation of assets that generate largely independent cash inflows.
Then we are faced to two things: what is meant with cash inflows and how we know they are
independent, and to what extent?
The standards provides guidance for that:
Cash inflows are inflows of cash and cash equivalents received from parties external
to the entity.
In identifying whether cash inflows from an asset (or group of assets) are largely
independent of the cash inflows from other assets (or groups of assets), an entity
considers various factors including:
how management monitors the entity’s operations (such as by product lines,
businesses, individual locations, districts or regional areas);
how management makes decisions about continuing or disposing of the
entity’s assets and operations.
Although the concept of a cash-generating unit seems straightforward and the standards
give illustrative examples of identification of a cash-generating unit, yet identifying the lowest
level of independent cash inflows for a group of assets requires, again, judgement, which is
where difficulties can arise.
Further to this complexity, is the presence of goodwill in a business combination. As we
know that goodwill does not generate cash flows independently of other assets or groups of
assets. Most likely, goodwill will contribute to the cash generation of multiple cash-
generating units, and not only one single cash-generating unit.
For the purpose of impairment testing, goodwill acquired in a business combination shall,
from the acquisition date, be allocated to each of the acquirer’s cash-generating units, or
groups of cash-generating units, that is expected to benefit from the synergies of the
combination, irrespective of whether other assets or liabilities of the acquiree are assigned to
those units or groups of units. Each unit or group of units to which the goodwill is so
allocated shall:
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(a) represent the lowest level within the entity at which the goodwill is monitored for
intenal management purposes; and
(b) not be larger than an operating segment as defined by paragraph 5 of IFRS 8 on
Operating Segments before aggregation.
Yet, by requiring the recoverable value of an asset or cash-generating unit to be measured
at the higher of fair value less costs to sell and value in use, then it is not always necessary
to calculate BOTH fair value less costs to sell and value in use as long as one of them (fair
value less costs to sell might be easier to measure) exceeds its carrying amount, then in this
case, the asset or cash-generating unit is not impaired and there is no need to calculate the
asset’s value in use.
IAS 36 provides a hierarchy of sources to obtain fair value less costs to sell:
The best evidence is a price in a binding sale agreement in an arm’s length
transaction, adjusted for incremental costs that would be directly attributable to the
disposal of the asset.
If there is no binding sale agreement, but an asset is traded in an active market, fair
value less costs to sell is the asset’s market price less the costs of disposal.
If there is no binding sale agreement or active market for an asset, fair value less
costs to sell is based on the best information available to reflect the amount that an
entity could obtain, at the end of the reporting period, from the disposal of the asset
in an arm’s length transaction between knowledgeable, willing parties, after
deducting the costs of disposal. In determining this amount, an entity considers the
outcome of recent transactions for similar assets within the same industry.
As a consequence of the definition of value in use, that is the present value of the future
cash flows expected to be derived from an asset or cash-generating unit, the following
elements shall be reflected in the calculation of an asset’s value in use:
(a) An estimate of the future cash flows the entity expects to derive from the asset;
(b) Expectations about possible variations in the amount or timing of those future cash
flows:
(c) The time value of money, represented by the current market risk-free rate of interest;
(d) The price for bearing the uncertainty inherent in the assets; and
(e) Other factors, such as illiquidity, that market participants would reflect in pricing the
future cash flows the entity expects to derive from the asset.
Thus estimating the value in use of an asset will involve the following steps:
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(a) Estimating the future cash inflows and outflows to be derived from continuing use of
the asset and from its ultimate disposal; and
(b) applying the appropriate discount rate to those future cash flows.
The standards noted that detailed, explicit and reliable financial budgets or forecasts of
future cash flows for periods longer than five years are generally not available. For this
reason, management’s estimates of future cash flows are based on the most recent budgets
or forecasts for a maximum of five years. Management may use cash flow projections based
on financial budgets or forecasts over a period longer than five years if it is confident that
these projections are reliable and it can demonstrate its ability, based on past experience, to
forecast cash flows accurately over that longer period.
Two notes given in the standards, that:
to estimate cash flow projections beyond the period covered by the most recent
budgets or forecasts, the entity shall extrapolate the projections based on the
budgets/forecasts using a steady or declining growth rate for subsequent years, unless
an increasing rate can be justified. This growth rate shall not exceed the long-term
average growth rate for the products, industries, or country or countries in which the
entity operates, or for the market in which the asset is used, unless a higher rate can
be justified.
Cash flow projections until the end of an asset’s useful life are estimated by
extrapolating the cash flow projections based on the financial budgets or forecasts
using a growth rate for subsequent years. This rate is steady or declining, unless an
increase in the rate matches objective information about patterns over a product or
industry lifecyle. If appropriate, the growth rate is zero or negative.
The standards requires that estimates of future cash flows shall
Include the following: Exclude the following:
(a) projections of cash inflows from the
continuing use of the asset;
(b) projections of cash outflows that are
necessarily incurred to generate the
cash inflows from continuing use of the
asset (including cash outflows to
prepare the asset for use) and can be
directly attributed, or allocated on a
reasonable and consistent basis, to the
asset; and
(c) net cash flows, if any, to be received
(a) estimated future cash inflows or
outflows that are expected to arise from
a future restructuring to which an entity
is not yet committed;
(b) estimated future cash inflows or
outflows that are expected to arise from
improving or enhancing the asset’s
performance;
(c) cash inflows from assets that generate
cash inflows that are largely
independent of the cash inflows from
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Include the following: Exclude the following:
(or paid) for the disposal of the asset at
the end of its useful life.
the asset under review (for example,
financial assets such as receivable);
(d) cash outflows that relate to obligations
that have been recognized as liabilities
(for example, payables, pensions or
provisions);
(e) cash inflows or outflows from financing
activities;
(f) income tax receipts or payments.
Unlike the cash flows used in an impairment test that are entity-specific, the discount rate is
supposed to appropriately reflect the current market assessment of the time value of money
and the risks specific to the asset (or cash-generating unit) for which the future cash flow
estimates have not been adjusted.
A rate that reflects current market assessments of the time value of money and the risks
specific to the asset (or cash-generating unit) is the return that investors would require if they
were to choose an investment that would generate cash flows of amounts, timing and risk
profile equivalent to those that the entity expects to derive from the asset. This rate is
estimated from the rate implicit in current market transactions for similar assets or from the
weighted average cost of capital of a listed entity that has a single asset (or a portfolio of
assets) similar in terms of service potential and risks to the asset under review.
When a specific rate for an asset or cash-generating unit is not directly available from the
market, which is usually the case, the entity’s Weighted Average Cost of Capital (WACC),
the entity’s incremental borrowing rate or other market rates can be used as a starting point.
While not prescribed, WACC is by far the most commonly used based for the discount rate.
The appropriate way to calculate the WACC is a complex subject, and one about which
there is much academic literature and no general consensus. The selection of the rate is
obviously a crucial part of the impairment testing process and, in practice, it will probably not
be possible to obtain a theoretically perfect rate. Therefore, the objective must be to obtain a
rate which is sensible and justifiable.
IAS 38 requires the discount rate used to be a pre-tax rate. Therefore, when the basis used
to estimate the discount rate is post-tax, that basis is adjusted to reflect a pre-tax. In
addition, the discount rate is independent of the entity’s capital structure and the way the
entity financed the purchase of the asset, because the future cash flows expected to arise
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from an asset do not depend on the way in which the entity financed the purchase of the
asset.
Value in use, as defined by IAS 36, is primarily an accounting concept and not necessarily a
business valuation of the asset or cash-generating unit. For calculating value in use, IAS 36
requires pre-tax cash flows and a pre-tax discount rate.
WACC is a post-tax rate, as are most observable equity rates used by valuers. Because of
the issues in calculating an appropriate pre-tax discount rate and because it aligns more
closely with their normal business valuation approach, some entities attempt to perform a
value in use calculation based on a post-tax rate and post-tax cash flows.
It is possible for a post-tax approach to give the same answer as a pre-tax approach.
Indeed, IAS 36’s Basis for Conclusions states that, in theory, discounting post-tax cash flows
at a post-tax discount rate and discounting pre-tax cash flows at a pre-tax discount rate
should give the same result, provided the pre-tax discount rate is the post-tax discount rate
adjusted to reflect the specific amount and timing of the future tax flows.
The general principles behind calculating a pre-tax discount rate are that:
no account is taken of tax losses (because these are accounted for separately) and
the tax base of the asset is equal to its value in use, so there are no timing
differences associated with the asset that will affect the entity’s future tax charge.
Goodwill and impairment
The asset of goodwill does not exist in a vacuum; rather, it arises in the group accounts
because it is not separable from the net assets of the subsidiary that have just been
acquired.
The impairment review of goodwill therefore takes place at the level of a cash-generating
unit, that is to say a collection of assets that together create an independent stream of cash.
The cash-generating unit will normally be assumed to be the subsidiary. In this way, when
conducting the impairment review, the carrying value will be that of the net assets and the
goodwill of the subsidiary compared with the recoverable amount of the subsidiary.
When looking to assign the impairment loss to particular assets within the cash-generating
unit, unless there is an asset that is specifically impaired, it is goodwill that is written off first,
with any further balance being assigned on a pro rata basis.
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The goodwill arising on the acquisition of a subsidiary is subject to an annual impairment
review. This requirement ensures that the asset of goodwill is not being overstated in the
group accounts. Goodwill is a peculiar asset in that it cannot be revalued so any impairment
loss will automatically be charged against income. Goodwill is not deemed to be
systematically consumed or worn out thus there is no requirement for a systematic
amortization.