Impairment of long-term non-financial assets - Key points of IAS 36 in 40 questions and answers
The financial crisis and the fall of stock market prices are indications of potential impairment of long-term non-financial assets (intangibles, goodwill, tangibles, etc.).
Against this background, many companies have experienced the difficulties of applying the impairment tests set out in IAS 36, Impairment of assets.
These difficulties are increased by the lack of visibility on business plans in a very uncertain economic and financial environment.
IAS 36 has undergone no major changes since its publication in March 2004, apart from some amendments as part of the annual improvements process of existing standards. It is not, therefore, any current action by the IASB which now leads us to examine the principles set out in the standard, but rather the current economic crisis.
Though the 2008 financial year did not lead companies to recognise significant impairment losses on non-financial assets, the topic remains nevertheless sensitive and challenging. Indeed, the assumptions and estimates adopted by management may have a significant impact on the outcome of impairment testing.
The objective of this brochure is to list the main questions which arise and thus resolve a number of practical difficulties in the application of IAS 36.
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