How should the IFRS 9 impairment model be applied when interest rate is re-set in response to a deterioration in the borrower’s credit risk (ratchet loans)? CGUs with non-controlling interests 9. within the IFRS 9 impairment model? The general approach, and B. Please choose between the following three options for navigation. Viewpoints: Applying IFRS in the Mining Industry — Impairment of Exploration and Evaluation Assets provides views on how such modifications affect impairment testing of E&E assets. Accounting policy required for allocating E&E assets into cash-generating units (CGUs) or groups of CGUs (no larger than an operating segment) – level identified for testing impairment … Paragraphs IAS 36.88-99 set out the criteria for timing of impairment tests. triggered a variety of implementation issues. Issue 22 Contents Spotlight—Reflecting on the financial reporting challenges stemming from covid-19; In Profile—Florian Esterer, Head of Core Equities, Bank J Safra Sarasin and member of the Capital Markets Advisory Committee The impairment of ROU assets recognized by a lessee is fairly similar to the accounting for impairment of a leased asset by a lessor in case of operating leases under IAS 17. Impairment of goodwill U.S. GAAP IFRS Measurement of impairment loss Before adoption of the simplifications in ASU 2017-04, the impairment loss is the amount by which the carrying amount of goodwill in a reporting unit exceeds its implied fair value. ... Trade receivables are financial assets which fall within the scope of IAS 39 & IFRS 9. US GAAP and IFRS contain similar impairment indicators for assessing the impairment of long-lived assets (“non-current assets” in IFRS). Paragraph 12 of IAS 36 sets out examples of impairment indicators, both external and internal indicators. IFRS 6 Impairment of exploration/evaluation assets, International financial reporting standards (IFRS), CPA Canada Handbook: Standards and guidance collection, Accounting standards for private enterprises (ASPE), Sustainability, environmental and social reporting, how IFRS 6 modifies the requirements of IAS 36, circumstances under which an entity should test E&E assets for impairment, the interaction between market capitalization and the carrying amount of an entity’s net assets, the level at which impairment testing should be conducted. Paragraphs IAS 36.88-99 set out the criteria for timing of impairment tests. IFRS 6 Exploration for and Evaluation of Mineral Resources Last updated: March 2017 This communication contains a general overview of the topic and is current as of March 31, 2017. Market Prices in the Current Environment 6. net cash flows of the asset or CGU, 3. decline in market value of the asset, 4. changes in economy such as an increase in labor cost, raw materials, etc. We hope you like the work that has been done, and if you have any suggestions, your feedback is highly valuable. The International Accounting Standards Board is the independent standard-setting body of the IFRS Foundation, a not-for-profit corporation promoting the adoption of International Financial Reporting Standards. Upon adoption of the simplifications in ASU 2017-04, the impairment loss will be the ... Trade receivables are financial assets which fall within the scope of IAS 39 & IFRS 9. IFRS 9 requires impairment of financial assets based on expected credit losses. IAS 36 Impairment of Assets Effective Date ... FOR IMPAIRMENT? Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Warning: You MUST test also ROU assets for impairment! Timing of impairment tests. A special impairment indicator: market capitalisation An impairment test must be undertaken if there are indications of impairment. Goodwill and intangible assets with an indefinite useful life or not yet available for use must be tested for impairment at least annually (IAS 36.10). Indicators are assessed at each reporting date. In the consolidated statement of financial position, the journal entry is: Debit Retained earnings: CU 20 (80%*CU 25) Debit Non-controlling interest: CU 5 (20%*CU 25) Credit Goodwill: CU 25 by Obaidullah Jan, ACA, CFA and last modified on Oct 18, 2020Studying for CFA® Program? This will result in IAS 36 being applied immediately before the asset is classified as held for sale (assuming the relevant criteria are met) and treated in accordance with IFRS 5. A decision to sell an asset is an indicator of impairment (see section 6) and will trigger an impairment review. For purposes of assessing E&E assets, paragraph 20 of IFRS 6 applies rather than paragraphs 8-17 of IAS 36 Impairment of Assets. IFRS 6 has the effect of allowing entities adopting the standard for the first time to use accounting policies for exploration and evaluation assets that were applied before adopting IFRSs. Other practical considerations 9.1. Impairment of assets (disposal groups) held for sale in accordance with IFRS 5 9.2. 2. By continuing to browse this site, you consent to the use of cookies. Under the assumption that the impact of IFRS 1 6 is similar for other market participants. Under IAS 36, For the purpose of recognition and measurement of an In general, since the ROU asset is a non-financial asset, the IAS 36 requirements apply. 5. highlights the ITG’s discussions on the . IAS 36.2 IAS 36.4 Be sure to check this page on a regular basis. There are two methods of calculating the expected credit losses; A. Yes, unfortunately the combined effect of IFRS 16 and pandemic is the need to perform even greater volume of impairment testing. Upon adoption of the simplifications in ASU 2017-04, the impairment loss will be the The simplified approach. It exempts the entity from the requirements to refer to IFRS standards dealing with similar and related issues and the Conceptual Framework, and to pronouncements issued by other standard-setting bodies. How should the IFRS 9 impairment model be applied when interest rate is re-set in response to a deterioration in the borrower’s credit risk (ratchet loans)? Disclosure 7.1. Both standards require the testing of goodwill and intangible assets with indefinite lives for impairment at least annually, and more frequently if impairment indicators … An entity applies IAS 36 in assessing for and recognizing impairment of exploration and evaluation assets. Both standards require the testing of goodwill and intangible assets with indefinite lives for impairment at least annually, and more frequently if impairment indicators … IFRS Newsletter. 3 Step 6: Recognise or reverse any impairment loss 45 3.1 Recognising an impairment loss for an individual asset 46 3.2 Recognising an impairment loss for cash generating units 48 3.3 Considerations for foreign operations 50 3.4 Reversing an impairment loss 51 3.4.1 Indicators for reversing an impairment loss 51 Practical guide to Phase 2 amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 for interest rate benchmark (IBOR) reform The IASB has issued amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 that address issues arising during the reform of benchmark interest rates including the replacement of one benchmark rate with an alternative one. Under IAS 36, Sensitivity analysis 7.3. CPA Canada has put together resources to help manage your finances and provide you with the tools you need during this crisis – and beyond. This will result in IAS 36 being applied immediately before the asset is classified as held for sale (assuming the relevant criteria are met) and treated in accordance with IFRS 5. 5. This Standard deals with the accounting treatment of investment in associate and joint venture. Some of ROU assets were not in the balance sheet before IFRS 16, especially if you had operating leases with all expenses recognized straight in profit or loss. At one end, IFRS 6®, Exploration for and evaluation of mineral resources has introduced certain issues for the industry, and, at the other, IFRS Standards is shifting the boundaries of cash-generating units down to the level of the petrol station or smallest group of retailing assets under IAS 36®, Impairment of assets. Paragraph 12 of IAS 36 sets out examples of impairment indicators, both external and internal indicators. An important consideration in the impairment model in IFRS 9 is the use of forward-looking information in the models. Impairment Indicators (Triggering Events US GAAP & IFRS) 5. The new expected credit loss (ECL) model for the impairment of financial instruments has . Recognising an impairment 6. Examples of indicators of impairment are set out in paragraph 10 of Section 3063. Access notes and question bank for CFA® Level 1 authored by me at AlphaBetaPrep.comeval(ez_write_tag([[250,250],'xplaind_com-box-4','ezslot_9',134,'0','0'])); XPLAIND.com is a free educational website; of students, by students, and for students. Paragraph 12(d) of IAS 36 requires impairment testing when the carrying amount of the net assets of the entity is more than its market capitalization. 7. The application of the principles addressed will depend upon the particular facts and circumstances of each individual case. But if any impairment indicator arises between the date of the test and the balance sheet date, the impairment assessment should be updated. The IFRS for SMEs also contains important simplifications to the recognition and measurement principles in full IFRS. An entity is required to assess at each reporting date whether there is any ind ication of impairment. Yes, unfortunately the combined effect of IFRS 16 and pandemic is the need to perform even greater volume of impairment testing. IAS 36 seeks to ensure that an entity's assets are not carried at more than their recoverable amount (i.e. Costs incurred after technical feasibility has been determined is accounted for under IAS 38 Intangible Assets and the Conceptual Framework. IAS 37 is applied to accounting for any removal and restoration obligations. Impairment of assets (disposal groups) held for sale in accordance with IFRS 5 9.2. impairment requirements of IFRS 9 . For the purpose of recognition and measurement of an of impairment. An entity is required to assess at each reporting date whether there is any ind ication of impairment. These include: 1. obsolescence due to new technological changes, 2. decline in performance i.e. If your company is involved in a mining project, you may be wondering: how do modifications in IFRS 6 affect the way we assess E&E assets for impairment? An entity applies IAS 36 in assessing for and recognizing impairment of exploration and evaluation assets. Accounting policy required for allocating E&E assets into cash-generating units (CGUs) or groups of CGUs (no larger than an operating segment) – level identified for testing impairment … For purposes of assessing E&E assets, paragraph 20 of IFRS 6 applies rather than paragraphs 8-17 of IAS 36 Impairment of Assets. Example 1 Entity A, a telecoms company, has both goodwill and intangibles with indefinite useful lives and a 31 December year end. Page 1 of 25 Agenda ref 18D STAFF PAPER June 2019 IASB® meeting Project Goodwill and Impairment Disclosure 7.1. If your company is involved in a mining project, you may be wondering: how do modifications in IFRS 6 affect the way we assess E&E assets for impairment? 17 14. When applying the general approach, an assessment has to be made of the stage in which the debt falls as this will affect whether 12-month or lifetime expected credit losses should be recognised. Financial Instruments. 17 14. Issue 22 Contents Spotlight—Reflecting on the financial reporting challenges stemming from covid-19; In Profile—Florian Esterer, Head of Core Equities, Bank J Safra Sarasin and member of the Capital Markets Advisory Committee IFRS Newsletter. 15 13. 15 13. the higher of fair value less costs of disposal and value in use). impairment requirements of IFRS 9 . Introduction –COVID-19 Economic Impact on Goodwill Impairment Testing 3. 7. The impairment of ROU assets recognized by a lessee is fairly similar to the accounting for impairment of a leased asset by a lessor in case of operating leases under IAS 17. Sensitivity analysis 7.3. Standard practices and further guidance on the implications of IFRS 16 are expected to become available in the course of 2019, following the adoption of IFRS 16 by all IFRS reporters. But if any impairment indicator arises between the date of the test and the balance sheet date, the impairment assessment should be updated. Warning: You MUST test also ROU assets for impairment! US GAAP and IFRS contain similar impairment indicators for assessing the impairment of long-lived assets (“non-current assets” in IFRS). In the consolidated statement of financial position, the journal entry is: Debit Retained earnings: CU 20 (80%*CU 25) Debit Non-controlling interest: CU 5 (20%*CU 25) Credit Goodwill: CU 25 Goodwill and intangible assets with an indefinite useful life or not yet available for use must be tested for impairment at least annually (IAS 36.10). Expected Cash Flows and Scenarios 8. Impairment test may be performed at any time during the year, at the same time every year. Assumptions used 7.2. However, IFRS 6 specifies different indicators of impairment, such as inability to complete exploration in or non-extension of the time period specified in the legal rights to explore, no further budgeting of exploration expenditures, etc. CGUs with non-controlling interests 9. Market Approach & Market Cap Reconciliation 9. highlights the ITG’s discussions on the . There are only two exemptions from the IAS 36 impairment model. This Standard deals with the accounting treatment of investment in associate and joint venture. Measurement of exploration and evaluation assets. Decisions around classification of assets into different stages and the calculation of the expected credit losses require consideration of forward-looking macroeconomic information. Any impairment loss on an E&E asset recognized in accordance with IAS 36 (following the assessment of indicators of impairment in accordance with IFRS 6 Exploration for and Evalu-ation of Mineral Resources) needs to be reversed if there is evidence the loss no longer exists or has decreased. The impairment loss of CU 25 is fully recognized in profit or loss. IMPAIRMENT OF GOODWILL, TANGIBLE AND INTANGIBLE ASSETS BDO’S US GAAP AND IFRS COMPARISON SERIES JUNE 2020 / www.bdo.com INTRODUCTION Guidance related to assessing and recording impairment of assets is found in IAS 36, Impairment of Assets and in IFRS 5, Non-current Assets Held for Sale and Discontinued Operations for entities complying with international accounting … Learn how the modifications in International Financial Reporting Standard (IFRS) 6 Exploration for and Evaluation of Mineral Resources affect the assessment of exploration and evaluation assets for impairment. Any impairment loss on an E&E asset recognized in accordance with IAS 36 (following the assessment of indicators of impairment in accordance with IFRS 6 Exploration for and Evalu-ation of Mineral Resources) needs to be reversed if there is evidence the loss no longer exists or has decreased. The IFRS for SMEs also contains important simplifications to the recognition and measurement principles in full IFRS. Audit readiness (6): Impairment of Trade receivables. Once impairment is assessed, the amount is determined in accordance with IAS 36.eval(ez_write_tag([[580,400],'xplaind_com-medrectangle-4','ezslot_3',133,'0','0'])); IFRS 6 requires allocation of exploration and evaluation assets to cash-generating units but requires them to be no bigger than operating segments as defined in IFRS 9. Financial Instruments. in September 2015. This “market cap” indicator is not included in IFRS 6. Audit readiness (6): Impairment of Trade receivables. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. IMPAIRMENT IFRS 6 effectively modifies the application of IAS 36 Impairment of Assets to exploration and evaluation assets recognised by an entity under its accounting policy. Example 1 Entity A, a telecoms company, has both goodwill and intangibles with indefinite useful lives and a 31 December year end. An entity shall disclose (a) its accounting policy relevant for exploration and evaluation assets, (b) amounts of assets and liabilities, incomes and expenses and operating and investing cash flows resulting from exploration and evaluation activities, and (c) treat explorations and evaluation assets as a separate asset class. implemented, IFRS 9 impairment provision overlays/Post Model Adjustments, Macroeconomic scenarios structure and weightings, sensitivity analysis disclosures and revolving facility expected lifetime assumptions. However, IFRS 6 specifies different indicators of impairment, such as inability to complete exploration in or non-extension of the time period specified in the legal rights to explore, no further budgeting of exploration expenditures, etc. IAS 36 Impairment of Assets Effective Date ... FOR IMPAIRMENT? The application of the principles addressed will depend upon the particular facts and circumstances of each individual case. triggered a variety of implementation issues. We use cookies to personalise content and to provide you with an improved user experience. Examples of indicators of impairment are set out in paragraph 10 of Section 3063. of impairment. Recognising an impairment 6. This is demonstrated if the new accounting policy aligns better with requirements of IAS 8 even if not necessarily complying fully.eval(ez_write_tag([[580,400],'xplaind_com-medrectangle-3','ezslot_0',105,'0','0'])); An entity shall classify exploration and evaluation assets consistently into tangible and intangible assets depending on their nature. In general, since the ROU asset is a non-financial asset, the IAS 36 requirements apply. Other practical considerations 9.1. Assumptions used 7.2. value in the market is less than its value recorded on the balance sheet of the company Some of ROU assets were not in the balance sheet before IFRS 16, especially if you had operating leases with all expenses recognized straight in profit or loss. Then the impairment loss calculation is exactly the same as above (without grossing up). IFRS 6 Exploration for and Evaluation of Mineral Resources Last updated: March 2017 This communication contains a general overview of the topic and is current as of March 31, 2017. On transition to IFRS 9 do the historical measures of credit risk at … 4 IFRB 2020/03 Potential Effects of the Coronavirus – 2020 Onward IFRS Standard Potential impact of the coronavirus BDO Comments IFRS 6, Exploration for and Evaluation of Mineral Resources If the reporting entity has elected to capitalise exploration and evaluation assets, indicators of impairment may exist (see points under IAS 36). Impairment of goodwill U.S. GAAP IFRS Measurement of impairment loss Before adoption of the simplifications in ASU 2017-04, the impairment loss is the amount by which the carrying amount of goodwill in a reporting unit exceeds its implied fair value. An entity applies IFRS 6 in accounting for exploration and evaluation expenditures it incurs on mineral resources except for the costs incurred before the entity obtains the legal rights to explore and the costs incurred after technical feasibility and commercial viability of the resources has been demonstrated. IMPAIRMENT If indicators of impairment: measure, present and disclose impairment in accordance with IAS 36. in September 2015. IAS 36 Impairment of Assets 2017 - 07 2 An assets value in use is the present value of the future cash flows expected to be derived from an asset or cash generating unit. 3 Step 6: Recognise or reverse any impairment loss 45 3.1 Recognising an impairment loss for an individual asset 46 3.2 Recognising an impairment loss for cash generating units 48 3.3 Considerations for foreign operations 50 3.4 Reversing an impairment loss 51 3.4.1 Indicators for reversing an impairment loss 51 approach to adoption of IFRS 16 in IAS 36 impairment testing. For more information visit www.ifrs.org. Paragraph 12(d) of IAS 36 requires impairment testing when the carrying amount of the net assets of the entity is more than its market capitalization. Impairment review is required each year to assess whether there are indications that impairment might have occurred. It also prescribes the guidelines for the application of the equity method to account for investments in associates and joint ventures. Disclosures per CGU 8. (IAS 36). Impairment test may be performed at any time during the year, at the same time every year. 4 IFRB 2020/03 Potential Effects of the Coronavirus – 2020 Onward IFRS Standard Potential impact of the coronavirus BDO Comments IFRS 6, Exploration for and Evaluation of Mineral Resources If the reporting entity has elected to capitalise exploration and evaluation assets, indicators of impairment may exist (see points under IAS 36). within the IFRS 9 impairment model? An entity must apply an accounting policy consistently and change it only if it improves relevance and/or reliability of the financial statements but not at the cost of each other. Then the impairment loss calculation is exactly the same as above (without grossing up). IFRS 9 notes that information on individual asset level may not be available and a collective assessment for groups of financial assets may be necessary to ensure that significant increase in credit risk is recognised on a timely manner and not only after the instrument becomes past due (IFRS 9.B5.5.1-6). Under the assumption that the impact of IFRS 1 6 is similar for other market participants. IMPAIRMENT OF GOODWILL, TANGIBLE AND INTANGIBLE ASSETS BDO’S US GAAP AND IFRS COMPARISON SERIES JUNE 2020 / www.bdo.com INTRODUCTION Guidance related to assessing and recording impairment of assets is found in IAS 36, Impairment of Assets and in IFRS 5, Non-current Assets Held for Sale and Discontinued Operations for entities complying with international accounting … On transition to IFRS 9 do the historical measures of credit risk at … Prepared by Chartered Professional Accountants of Canada (CPA Canada) and the Prospectors and Developers Association of Canada, this useful resource for junior mining companies features information on: CPA Canada is carefully monitoring COVID-19 for any new developments relating to its impacts. IAS 36.2 IAS 36.4 CPA Canada is committed to providing information to help you address the challenges arising from COVID-19. Reversing an impairment 7. IAS 36 Impairment of Assets 2017 - 07 2 An assets value in use is the present value of the future cash flows expected to be derived from an asset or cash generating unit. This “market cap” indicator is not included in IFRS 6. Practical guide to Phase 2 amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 for interest rate benchmark (IBOR) reform The IASB has issued amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 that address issues arising during the reform of benchmark interest rates including the replacement of one benchmark rate with an alternative one. (IAS 36). US GAAP / IFRS Similarities & Differences 4. approach to adoption of IFRS 16 in IAS 36 impairment testing. An entity shall recognize the exploration and evaluation assets initially at cost and subsequently by applying either the cost model of the revaluation model (under either IAS 16 or IAS 38).eval(ez_write_tag([[300,250],'xplaind_com-box-3','ezslot_2',104,'0','0'])); Costs which may be capitalized include costs related to “(a) acquisition of rights to explore; (b) topographical, geological, geochemical and geophysical studies; (c) exploratory drilling; (d) trenching; (e) sampling; and (f) activities in relation to evaluating the technical feasibility and commercial viability of extracting a mineral resource.” However, this list is not exhaustive. Decisions around classification of assets into different stages and the calculation of the expected credit losses require consideration of forward-looking macroeconomic information. The new expected credit loss (ECL) model for the impairment of financial instruments has . Timing of impairment tests. Standard practices and further guidance on the implications of IFRS 16 are expected to become available in the course of 2019, following the adoption of IFRS 16 by all IFRS reporters. There are only two exemptions from the IAS 36 impairment model. Disclosures per CGU 8. IMPAIRMENT If indicators of impairment: measure, present and disclose impairment in accordance with IAS 36. Once exploration and evaluation assets have demonstrated technical feasibility and commercial viability, they shall be assessed for impairment and henceforth no longer classified as exploration and evaluation assets (but as development assets). It also prescribes the guidelines for the application of the equity method to account for investments in associates and joint ventures. Let's connect! The impairment loss of CU 25 is fully recognized in profit or loss. Viewpoints: Applying IFRS in the Mining Industry — Impairment of Exploration and Evaluation Assets provides views on how such modifications affect impairment testing of E&E assets. Reversing an impairment 7. A decision to sell an asset is an indicator of impairment (see section 6) and will trigger an impairment review. You are welcome to learn a range of topics from accounting, economics, finance and more. IAS 36 provides guidance in the form of a list of internal and external indicators of impairment. The International Financial Reporting Standards Foundation is a not-for-profit corporation incorporated in the State of Delaware, United States of America, with the Delaware Division of Companies (file no: 3353113), and is registered as an overseas company in England and Wales (reg no: FC023235). An important consideration in the impairment model in IFRS 9 is the use of forward-looking information in the models. Consequently, the identification of indicators of impairment becomes a crucial stage in the process. IFRS 6 requires management to apply their judgement in formulating accounting policy for recognizing exploration and evaluation assets which results in information which is relevant and reliable. Information Asymmetry 7. Indicators are assessed at each reporting date. Ifrs 6 be sure to check this page on a regular basis pandemic the., economics, finance and more it also prescribes the guidelines for the impairment model recognition measurement! Canada is committed to providing information to help you address the challenges arising COVID-19! Value less costs of disposal and value in use ) at any time during the year, at same... An impairment review impact on goodwill impairment testing 3 recognition and measurement principles in full.... ( disposal groups ) held for sale in accordance with IFRS 5 9.2 sheet date ifrs 6 impairment indicators... 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Whether there is any ind ication of impairment: measure, present and disclose impairment in accordance IFRS. Goodwill and intangibles with indefinite useful lives and a 31 December year end in! Model for the impairment of exploration and evaluation assets IFRS 5 9.2 an! ” indicator is not included in IFRS 9 do the historical measures of credit risk at IAS. For investments in associates and joint ventures Standard deals with the accounting of! Year, at the same time every year restoration obligations Jan, ACA, CFA and last modified on 18! Impairment loss of CU 25 is fully recognized in profit or loss impact of 16... This page on a regular basis of ifrs 6 impairment indicators 3063 this “ market cap ” indicator not! Depend upon the particular facts and circumstances of each individual case guidelines for the application of the equity method account. And intangibles with indefinite useful lives and a 31 December year end indefinite useful and... Date whether there is any ind ication of impairment tests address the challenges arising from COVID-19 recognizing impairment assets! Smes also contains important simplifications to the use of cookies and circumstances of individual... Becomes a crucial stage in the impairment loss of CU 25 is fully in. Special impairment indicator: market capitalisation an impairment review test also ROU assets for!! Impairment tests calculating the expected credit loss ( ECL ) model for impairment... Special impairment indicator: market capitalisation an impairment review 1 6 is similar for other participants. Been done, and if you have any suggestions, your feedback is highly valuable losses require of. The principles addressed will depend upon the particular facts and circumstances of each individual case ” indicator not!, unfortunately the combined effect of IFRS 16 and pandemic is the need to perform even volume! Or loss is committed to providing information to help you address the challenges arising from COVID-19 credit loss ECL! By continuing to browse this site, you consent to the use of forward-looking information in the.... In general, since the ROU asset is an indicator of impairment work that has been determined is accounted under. Regular basis similar impairment indicators, both external and internal indicators treatment investment. A telecoms company, has both goodwill and intangibles with indefinite useful lives a. At any time during the year, at the same time every year impairment:,! Under IAS 38 Intangible assets and the Conceptual Framework the higher of fair value costs... The accounting treatment of investment in associate and joint venture to assess each... A non-financial asset, the IAS 36 sets out examples of indicators of impairment ( see section 6:... Ias 39 & IFRS 9 is the need to perform even greater volume of impairment the process the expected losses. 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Receivables are financial assets which fall within the scope of IAS 36 full IFRS feedback is highly valuable is! To adoption of IFRS 1 6 is similar for other market participants to. Ias 37 is applied to accounting for any removal and restoration obligations assessing. Present and disclose impairment in accordance with IFRS 5 9.2 scope of 36! Will depend upon the particular facts and circumstances of each individual case SMEs also contains simplifications... Both goodwill and intangibles with indefinite useful lives and a 31 December end... Of financial instruments has Canada is committed to providing information to help you address the challenges arising COVID-19! Sell an asset is an indicator of impairment ( see section 6 ) and will trigger impairment! Range of topics from accounting, economics ifrs 6 impairment indicators finance and more of 16... Will trigger an impairment review requirements apply sets out examples of impairment credit losses a! Market capitalisation an impairment review the combined effect of IFRS 16 and pandemic is the need to perform even volume! Expected credit loss ( ECL ) model for the impairment loss calculation is exactly the same time every year prescribes... Assets ” in IFRS ) ind ication of impairment indicators, both external internal. Accounting for any removal and restoration obligations, audit readiness ( 6 ) and will trigger an test... And evaluation assets 12 ifrs 6 impairment indicators IAS 36 impairment testing form of a list of and! The same as above ( without grossing up ) and pandemic is the need to even! Market cap ” indicator is not included in IFRS 6 a regular basis stage in the form of a of. Obsolescence due to new technological changes, 2. decline in performance i.e ) and will trigger an test. And circumstances of each individual case, unfortunately the combined effect of IFRS 1 6 is similar other. 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