# Assignment Help on Impairment of Assets

IAS 36 ensures that the business is not carrying their company’s Assets at more than recoverable amount from the assets. IAS 36 is applicable to all the assets except Goodwill and certain intangible Assets. Courseworktutors helps student in all their assignment relating to impairment of Assets. Our email based impairment of Assets assignment help ensures student get practical knowledge on Impairment treatment and apply them accordingly.

## What is Impairment of Assets ?

Impairment of Assets deals with the situation where the Carrying Amount of the Asset is more than the maximum benefit that can be derived from the assets. Impairment of Assets can be measured in two ways :

• When the carrying Value of Asset is more than the Current market Price : For Example  The Value of Plant and Machinery Shown in Balance Sheet is 100000\$ whereas the market price of the Plant and Machinery is \$80000. Than there is a difference of \$20000 which is termed as Impairment Loss.
• When the benefit that can be derived from Asset is Less than the Carrying Amount : For Example The Value of Plant and Machinery Shown in Balance Sheet is 200000\$ whereas life of Plant and Machinery is 5 years and the total benefit that can be derived in 5 years is \$160000. Than there is a difference of \$40000 which is termed as Impairment Loss.

### Definition of Carrying Amount and Recoverable Amount as per IAS 36

Carrying Amount is the value at which an asset is recorded at the Balance sheet after deducting the Accumulated depreciation and estimates Impairment Loss.

Recoverable Amount is the Value which is higher of the two :

Net Selling price which is disposal value of Asset less cost of disposal,

Value in Use which is the present value of cash flow expected to arise from use of the asset and after use disposal of the asset.

### How to Recognize Impairment Loss as per IAS 36?

• Impairment Loss is recognized as an expense in the Profit and Loss Account immediately.
• In case there is a Revaluation Reserve , impairment Loss is adjusted against Revaluation Reserve. The balance of the loss is charges to P&L immediately.
• The decreased value of the asset should be depreciated over the remaining useful life of the asset.
• Change in method of depreciation is done only in case where the effect will be restrospective.

What is the applicability of IAS 36?

IAS 36 applies to all assets except the following :

Inventories

Assets from Contruction Contracts

Financial Assets

Deferred Tax Assets

What is the time for Assesement of Impairment Loss?

Impairment Loss is generally assessed at each balance sheet date or when there is an indication that an asset has been impaired.

What are the indications for Impairment of Assets?

Impairment of Assets can be either from external or Internal factors.  External factors are decrease in value of Asset significantly or increase in market rate of interest. Internal factors are damage in asset , poor economic performance of Asset.

Please send your problems related to Impairment of Assets  and we will forward it to our tutors for analysis. We will provide you Impairment of Assets assignment help and homework help without plagiarism in a timely manner at reasonable price without compromising on the quality