{"id":2947,"date":"2025-11-11T08:41:21","date_gmt":"2025-11-11T08:41:21","guid":{"rendered":"https:\/\/usafe-ca.com\/?p=2947"},"modified":"2025-11-11T08:41:21","modified_gmt":"2025-11-11T08:41:21","slug":"ias-36-impairment-of-assets","status":"publish","type":"post","link":"https:\/\/usafe-ca.com\/zh\/2025\/11\/11\/ias-36-impairment-of-assets\/","title":{"rendered":"IAS 36 Impairment of Assets"},"content":{"rendered":"

IAS 36 Impairment of Assets \u2013 Ensuring Assets Are Not Overstated<\/strong><\/h3>\n
1\ufe0f\u20e3 Introduction: Understanding IAS 36 Impairment of Assets<\/strong><\/h5>\n

IAS 36 Impairment of Assets<\/strong> sets out procedures to ensure assets are carried at no more than their recoverable amount<\/strong> \u2013 the higher of fair value less costs of disposal<\/strong> \u548c value in use<\/strong>.
In Singapore, where transparency and fair presentation are essential, IAS 36 Impairment of Assets helps firms prevent overstated asset values and ensures financial statements reflect true economic conditions.<\/p>\n

This standard applies across property, equipment, goodwill, and investments accounted for under IAS 28 Investments in Associates and Joint Ventures<\/strong>.<\/p>\n

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2\ufe0f\u20e3 Purpose and Scope<\/strong><\/h5>\n

IAS 36 applies to most tangible and intangible assets, except those covered by other standards such as IAS 2 Inventories, IAS 12 Income Taxes, or IAS 19 Employee Benefits.
Its purpose is to make sure companies recognise an impairment loss<\/strong> whenever the carrying amount of an asset exceeds its recoverable amount.<\/p>\n

The standard requires management to:<\/p>\n

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    Identify possible impairment indicators.<\/p>\n<\/li>\n

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    Estimate recoverable amount.<\/p>\n<\/li>\n

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    Recognise and disclose impairment losses promptly.<\/p>\n<\/li>\n<\/ul>\n

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    3\ufe0f\u20e3 Identifying Impairment Indicators<\/strong><\/h5>\n

    Entities must review assets for impairment indicators at each reporting date<\/strong>.
    Common internal and external indicators include:<\/p>\n

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      Market declines in asset value.<\/p>\n<\/li>\n

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      Adverse changes in technology, markets, or regulations.<\/p>\n<\/li>\n

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      Physical damage or obsolescence.<\/p>\n<\/li>\n

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      Cash-flow declines or continuing operating losses.<\/p>\n<\/li>\n

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      Significant changes in interest rates or discount rates.<\/p>\n<\/li>\n<\/ul>\n

      When these signals appear, an impairment test must be performed without delay.<\/p>\n

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      4\ufe0f\u20e3 Recoverable Amount: Fair Value vs Value in Use<\/strong><\/h5>\n

      IAS 36 Impairment of Assets defines recoverable amount<\/strong> as the higher of<\/strong>:<\/p>\n

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        Fair value less costs of disposal (FVLCD)<\/strong> \u2013 the price obtainable in an arm\u2019s-length sale minus selling costs.<\/p>\n<\/li>\n

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        Value in use (VIU)<\/strong> \u2013 the present value of future cash flows expected from the asset or cash-generating unit (CGU).<\/p>\n<\/li>\n<\/ul>\n

        Discount rates should reflect current market assessments of time value of money and specific asset risks.<\/p>\n

        IAS 28 Investments in Associates and Joint Ventures<\/a><\/p><\/blockquote>\n