This online IFRS training is being delivered live in a single 4 hour session which runs from 13:00 – 17:00 London (UK).
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This focus session deals with key considerations when applying IAS 36 Impairment of Assets. The Standard applies widely, both to non-financial assets such as property, plant and equipment, goodwill, intangible and right-of-use assets and to financial assets such as interests in associates and joint ventures. IAS 36 is complex to apply and involves significant subjective judgements. Its valuation model requires the calculation of an asset’s (or cash-generating unit’s) recoverable amount: this may involve calculating both value in use by estimating future cash flows and determining a suitable discount rate and fair value using a valuation technique under IFRS 13 Fair Value Measurement.
The impact of the Covid-19 pandemic on applying IAS 36 has been to increase the frequency of impairment testing and the complexity of its application. When an entity’s operations have been adversely affected, it is likely that more assets must be tested and some may have to be tested more frequently. Heightened uncertainty affects estimates of cash flows and discount rates and could also change which method of determining value in use is appropriate. Pandemic-derived uncertainties have also impacted on valuation techniques for determining fair values.
The session also enables participants to raise and discuss specific issues that they have identified or anticipate when applying IAS 36 in practice.