AS-28: IMPAIRMENT OF ASSETS - SUMMARY CHART

Assets : PPE .
Intangible Assets
, Investment property 130

Treatment of Impairment loss

indicator of impairment
fe de >
-
Generally Dr to PCI
.
.

External Internal
If asset revalued
↓ >
-
has been
previously upwards ,
then

Impairment loss ist

-
bans/restric
by govt >
-
Inadequate usage -

and
: write off
against revaluatives
.

new
technology Physical Damage balance I if will be
> -
>
- :

any
-

interest increases Current f estimate <previous written PCL

market rale off
against .
>
-
>
-

>
- market cap <book value of N A . .
If estimate

- Reversal of Impairment Loss

Any of the above exists

↓ >
-
Impairment loss will be reversed ifIndicators of impairment
calculate impairment Loss cease to exist.
↓ ↓

carrying Amount 7 Recoverable Amount > In such case current

carrying amount will be
brought up to
-

to normal
carrying
I
amount .

Also Consider CA . .
Book value at the
of a related end of current FY
↓
Current COA .
Normal CoA- Recoverable Amt .

↓
↓
Liability
Prov for
↓ ↓
overburden Price in Use
Eg : Net
selling value 100 180 300
·

in case of a

Price N #
future cash flows
mine
- ·
selling >
-
Py of

residual increased up to increased to 300

cost of
selling + PV of value C A Can be C A can be
- . . ·
.

180 as per As-28 -

as per As-10 : Revaluation model
.

of of similar asset Cash unit

1. consider value latest transaction
Generating
.

. Consider
2 market value in second hand market .

smallest identifiable of related assets that

>
group generate
-

Cf
independently
. ·

1 Consider
projected cashflows of
follow
5years until more

is
can be .
justified (In exams what is
given in >
- This applicable when Individual
an Assets recoverable

question) . amount is not ascertainable

.

If
C .
cashflows are in
foreign currency ,
then convert
into date of
E
using exchange rate on impairment· CGU

.
3 If
probability is given ,
then :- If X prob
Y
prob
Y
If X

CF X

Total
prob Carrying Amount
② Recoverable Amount

.
4 If is lowest value Al ↓
given Highest value (A
:
range ; + >
-

Net Value in Use

selling
2 A2 : CA Price
A3 : CA

* Also consider
carrying amt
w e . .

higher C

of a related
liability
.
Y

impairment loss
 Treatment of Impairment loss in case of a car . Compare
8 with RA of
entity 130
X 9
. Impairment loss

Normally charged
to
Pel. 11-ist wotf
10
against Gu
·

Balance
againstCGUs
>
carrying amount of all assets within a car
proportionately
-

reduced
will be proportionately
=> same concept applicable for corporate assets
.

>
- If cGU
the also has
goodwill the impairment ,

loss will be ist written off

against goodwin
and the balance if
11 will be cloth Reversal of Impairment of Goodwill
any
proportionately against C A
. .
of other assets
.

can be reversed if i
only
>
-

Reversal of impairment loss of Car 1. External indicators cease to exist :

So such external events happen subsequently that

>
-
If indications of
goodwill cease to exist then
11 can reverse the impact of the impairment-
be reversed

>
- Maximum amount of reversal =
DISCLOSURE : - Read from book

increased to
Current C A . > Normal CoA .

Proportionately added to
the value of each asset of
CGU
· Proportion = C A - of
.
assets

>
- While reversal
goodwill will be reversed at
last

Impairment of Goodwin

Since
goodwill doesnot have independent cashflows ,
we will
with
allocate it either the CGU's or the
entity
as a whole

↓ ↓
Goodwill is allocated Goodwin is not allocated
to CGU
. to CGU-

>
-
Apply bottom
up test
. >
Apply Bottom up Tests
-

>
Apply Top Down Test -
-

Meaning: 1 C A of each far

·
- . .
.

of GGU
Meaning
FY C A
.+
2 GW proportion on DOA : 1 each
. . . .
:

3
. Total C A . . 2 . &A
R .

. Recoverable Amount
4 .
3 Impairment loss

Go R CoA
.
5 Impairment ross
. -

Ist . Total
5 of RCA of all CGU
J .

woff-against Gu
6 Add: GW
then other assets of CGU
-
.

. Total
7 RCA from entity Poy .