Methodology for calculating the impairment of financial and non-financial assets (Sirotina E.A.). We assess the impairment of assets Methodology for determining the impairment of financial assets

IFRS 36 provides a fairly broad list of indicators that indicate the possible impairment of assets. At the same time, external and internal signs are distinguished.

About manifestation external indications of a possible impairment of assets we can say if the following events occurred during the reporting period: financial statements standard asset

* The market value of the asset has declined much more than expected based on its normal operating conditions.

A typical example of such a situation is the general recession in the economy of a country (region).

* Significant technological, legal or economic changes have occurred or are likely to occur that adversely affect the position of the company.

For example, the introduction by competitors of new, more advanced and economical production technologies, materials or products.

* Market interest rates or other market indicators of return on investment have risen.

Since the asset's value in use is calculated as the sum of the discounted cash flows from the asset's use, an increase in the discount rate will reduce the total value.

* The book value of the company's net assets has become larger than its market capitalization.

Recall that the market capitalization of a company is understood as the product of the number of shares of the company in circulation and the market value of the share. The market capitalization of a company will reflect how the market values ​​our company.

In list internal indications of possible asset impairment the following identified during the reporting period are mentioned:

• * signs of obsolescence of the asset;
• * damage or loss (theft) of an asset;
• * a change in the use of the asset that adversely affected or will affect the cash flows from the asset;
• * establishment of a limited useful life for an intangible asset with an unlimited useful life;
• * changes in internal reporting indicators that prove that the current or future results of using the asset are worse than originally expected.

For example, the acquisition and operation costs turned out to be higher, the income from the use of the asset turned out to be less than it was originally budgeted.

The list of features provided is not exhaustive. In order to independently continue the list proposed by the standard and identify situations in which the carrying amount of assets may be greater than their recoverable amount, it makes sense to refer to the economic essence of indicators of impairment. The consequences of the situations listed above is a decrease in future cash flows from assets compared to what was originally expected.

Thus, a recession in the economy of a country (region) is usually characterized by a drop in purchasing power, as a result of which the volumes and prices of sales of products (works, services) that the company produces using its assets can significantly decrease. Damage to property will prevent the company from receiving the income from production and sales of products that would have been received from the operation of undamaged property, or will create additional costs for the company to restore the normal operating parameters of the asset. The cost of selling a damaged asset will also be less than the cost of selling a similar undamaged one.

Therefore, any situation that results in a decrease in future cash flows from an asset is an indication that the asset may be impaired and requires an impairment test in accordance with IAS 36.

Basic rules for conducting an impairment test. For all assets and cash-generating units that are subject to IAS 36, an entity must mandatory impairment test at the end of each financial year. If a company prepares interim financial statements - for example, quarterly - a review for signs of impairment should be carried out at each reporting date.

If there are indications of impairment, an estimate of the recoverable amount is required. If there is no indication of impairment, there is no need to calculate the recoverable amount except in the following cases:

• intangible assets with an unlimited useful life,
• Assets not ready for use
• · goodwill acquired in a business combination.

Intangible assets with an indefinite useful life are those for which it is difficult to establish the exact length of the period during which the company expects to receive economic benefits from these assets. Note that unlimited does not mean infinite. Intangible assets with an indefinite useful life are not amortized but are tested for impairment. Assets not ready for use are non-current assets that have been capitalized but not put into operation. Goodwill acquired in a business combination is the difference between the cost of the investment (the cost of acquiring the company) and the acquired share of the net assets of the acquiree.

For these exceptional cases, an annual impairment test must be performed regardless of whether there is any indication of impairment. Checking "exceptional" assets for impairment can be carried out at any time during the year, but every year - in the same period (that is, it can be not only 31.12..XX, but any other reporting date during the year). All other assets are tested for impairment at the end of the financial period.

The calculation of an asset's recoverable amount (or CGU) involves choosing the maximum of value in use and fair value less costs to sell. Calculation of both values ​​is not always required: if either of the two values ​​exceeds the asset's carrying amount (CGU), the asset is not impaired and the second value does not need to be calculated.

The approach to determining the recoverable amount of an asset and performing an impairment test is presented in Table 1.

Table 1. Approach to determining the recoverable amount of an asset and performing an impairment test

(*): situations 1, 2, 3 are not related.

Determining the fair value of an asset. As noted earlier, fair value less costs to sell is the amount that could be received from the sale of an asset in an arm's length transaction between knowledgeable, willing parties.

The best indication of the fair value of an asset is the price specified in the sale and purchase agreement between independent, well-informed, willing parties to this transaction. Note that the characteristics of the parties to the sale and purchase agreement - independence, awareness, desire to make a deal - are a prerequisite for determining fair value.

In the absence of a sale and purchase agreement, fair value can be determined as the price in an active market - the purchase price of a similar asset in the market, the price of the last transaction to acquire a similar asset.

In the absence of a sale and purchase agreement and an active market, fair value is determined based on the best available information.

To calculate the asset's recoverable amount (CGU), the fair value, determined by one of the methods proposed above, must be adjusted for costs to sell.

Selling costs are incremental costs that are directly attributable to the sale of an asset, excluding finance costs and income tax, and costs already included in liabilities. Examples of selling costs are dismantling costs, direct costs of pre-sale preparation of an asset and legal support of a sale transaction.

The direct costs of pre-sale preparation of an asset should be distinguished from the costs of conducting an independent valuation of assets. The latter are not costs to sell (because the valuation of assets is performed as a mandatory procedure required by the standard, but not in connection with the disposal of assets) and are not included in the calculation of fair value less costs to sell. It can be clarified that the cost of an independent valuation is recognized in the income statement for the period on an accrual basis.

Determining the value in use of an asset. Value in use is the sum of discounted future cash flows from the asset (cash generating unit) under consideration.

The calculation of the value in use of an asset (CGU) involves the formation of cash inflows and outflows from the use of an asset (CGU), as well as their discounting at the appropriate discount rate.

Asset cash flows (CGUs) should include:

• * cash inflows from the use of an asset, which represent proceeds from the sale of products (works, services) produced using the asset or cash-generating unit in question. At the same time, the proceeds from the sale of products (works, services) can be determined in a standard way - as the product of sales volumes in physical terms by the selling price;
• * proceeds from the sale of an asset at the end of its useful life, as well as cash outflows directly related to inflows:
• * variable costs for the production of products (works, services), defined as the product of the volume of sales of products in physical terms and the variable costs for the production and sale of a unit of output;
• * expenses for scheduled preventive repairs.

Cash flows from use of an asset (CGU) must not include:

• * overhead,
• * flows associated with the improvement and modernization of the asset. That is, when calculating the value in use, both cash outflows for modernization and additional income from improving the efficiency of assets should not be taken into account;
• * flows from financial activities - attraction and repayment of loans, payment of interest, etc.;
• * taxes.

The basis for constructing forecast cash flows from the use of the asset (CGU) should be budgets approved by the company's management. The data included in the calculation should be based on assumptions that reflect the current state of the asset and contain the best estimates of future economic conditions for its use.

forecast period shall not exceed five years, unless otherwise justified. Over a five-year period, cash flows can be shaped to reflect rising growth rates. If a company chooses a forecast period longer than five years (having justified such a choice), cash flows beyond the five-year period must either remain unchanged or be formed using decreasing coefficients. The standard notes that there are exceptional cases in which flows beyond the five-year timeframe can be generated using increasing growth rates. Exceptions are allowed if a company can demonstrate that it is justified to apply an increasing growth rate beyond the five-year review horizon. In allowing for this exception, the standard specifies that the growth rate for flows beyond the five-year period should not exceed the long-term growth rate for the goods in question, unless otherwise justified.

As you can see, in terms of choosing the planning horizon and the rules for assessing future flows, the standard gives companies a certain degree of freedom, provided that the data included in the calculation are justified.

As discount rates choose a pre-tax rate that reflects the current market value of money and the risks inherent in the asset (the CGU). In particular, it can be the company's weighted average cost of capital (WACC) or market lending rates.

The discount index used in calculating the value in use of an asset (CGU) is determined by the formula:

1/ (1+ discount rate)^ n

where the power of n is the number of the period (year) under consideration.

A possible option for calculating the value in use of an asset (CGU) is presented in Table 2.

Table 2. Possible option for calculating the value in use of an asset (CGU)

• 0,91 = 1/(1+10%)^1
• 0,83 = 1/(1+10%)^2
• 0,51 = 1/(1+10%)^7
• 45,5 = (100-50)*0,91
• 12.5 \u003d (120-60-45) * 0.83, etc.

Note that the need to discount cash flows from the use of an asset is associated with the unequal value of money over time. The literal translation of the term discounting means “reducing the cost, markdown. The decrease in the value of cash flows over time suggests that the amount of money today is more expensive than a similar amount of money after a certain time, since during this time the specified amount of money, being invested, will bring additional income to their owner. Thus, discounting is a calculation of the present value of money amounts relating to future periods.

For example, consider the data in Table 2 for the fourth year. A company that currently has a sum of money of 24 units and invested it for 4 years in a business that brings 10% per annum (discount rate) at the end of the fourth year would receive an amount of 35 units (160-80-45). Using the discount index (1/(1+10%)^4 = 0.68), we find that the amount of cash that will be received from the asset in the fourth year of operation (35 = 160-80-45) is equivalent to the amount of 24 (= 35 * 0.68) based on the beginning of the planning period.

From January 1, 2018, accountants of budgetary institutions must apply the provisions of the Order of the Ministry of Finance of the Russian Federation dated December 31, 2016 No. 259n, which approved the Federal Accounting Standard for Public Sector Organizations “Impairment of Assets” (hereinafter referred to as the “Impairment of Assets” Standard). What are the signs of impairment of assets and reduction of impairment loss of assets? What is the classification and composition of such features? What are the requirements for the procedure for recognizing (recovering) losses from depreciation of assets in accounting? The answers to these questions are given in the material.

Impairment of an asset is a decrease in the value of an asset that exceeds the planned (normal) decrease in its value due to the possession (use) of such an asset (normal physical and (or) obsolescence), associated with a decrease in the value of the asset. Let's consider the interpretation of this concept and others given in the Asset Impairment Standard using an example.

Example 1

The car is on the balance sheet of the institution. It is 980,000 rubles. The car was depreciated in the amount of 450,000 rubles. The residual value of the car is 530,000 rubles. (980,000 - 450,000). The car was badly damaged in the accident. According to experts, the damaged car - 250,000 rubles.

The appraised value of the car, determined by the experts, is called the fair value. It is less than the residual value of the car (250,000 rubles).< 530 000 руб.). Снижение стоимости актива свыше суммы начисленной на него амортизации является обесценением актива.

The excess of an asset's residual value over its fair value less costs of disposal is called asset impairment loss . Recall that fair value is the price at which ownership of an asset can be transferred between knowledgeable, willing, independent parties. The procedure and methods for determining the fair value are established in clauses 53-60 of the Standard “Conceptual Framework for Accounting and Reporting of Public Sector Organizations”.

The cost of disposal of an asset is determined as follows:

* A group of assets is identified as a GDP unit if it is possible to isolate the cash flow resulting from the use of this group of assets from the total cash flow received as part of the activities of the accounting entity.

As an example of asset disposal costs, the standard mentions the costs of dismantling the asset, direct costs of pre-sale preparation of the asset, costs of legal services, negotiation, and other similar costs. The costs of paying severance pay and other costs associated with the reduction or reorganization of the activity of an accounting entity are not costs of asset disposal.

Example 2

The residual value of the car is 530,000 rubles. The fair value of the asset is RUB 250,000. Asset disposal costs amounted to RUB 35,000. (of which 25,000 rubles - payment for the services of an expert in evaluating the value of the car, 10,000 rubles - the cost of delivering the car to the buyer).

Based on the available data, the impairment loss of the asset will be RUB 245,000. (530,000 - 250,000 - 35,000).

The Impairment of Assets standard does not apply to the following types of assets:

inventories;

financial assets, unless otherwise provided by the specified standard;

other assets - in cases where the procedure for their depreciation, as well as disclosure of information about their depreciation in the accounting (financial) statements, is carried out in accordance with the provisions of other federal accounting standards for public sector organizations, a unified methodology for budget accounting and budget reporting established in accordance with the budgetary the legislation of the Russian Federation, and Instructions No. 33n.

Signs of asset impairment, their classification and composition

Identification of signs of asset impairment is carried out by the institution as part of the inventory of assets and liabilities, carried out by it in order to ensure the reliability of the data of the annual accounting (financial) statements, by analyzing the presence of any signs indicating a possible impairment of the asset (hereinafter - impairment test, impairment indicators) (p .6 of the Asset Impairment Standard):

individually for each NGDP asset;

individually for each GDP asset;

for each individual unit of the GDP.

The Asset Impairment standard distinguishes between external and internal signs of an asset's impairment. Let's see what these features are.

If there is any indication of an asset's impairment, the accounting entity (institution) assesses the fair value of the asset. This cost is determined using the market price method or the amortized replacement cost method. The institution uses the method that provides the most reliable estimate of the asset's fair value. The chosen method for determining the fair value of an asset is set in the decision on determining the fair value of the asset (clauses 10, 11 of the Asset Impairment Standard).

At the same time, in deciding whether to measure fair value, an institution assesses whether an asset needs to be adjusted for its remaining useful life. If, based on the results of the analysis of the identified signs of asset impairment, the accounting entity decides to record the asset on off-balance accounts, then such an asset is not tested for impairment (clause 14 of the Asset Impairment Standard).

Determining the amount of an asset impairment loss in accounting

If an asset at the annual reporting date exceeds the fair value of the asset, net of the costs of disposal of such an asset, calculated in accordance with the decision made by the accounting entity to determine the fair value of the asset, then the amount received by calculation is recognized as an asset impairment loss (clause 15 of the Asset Impairment Standard) . The decision to recognize a loss from depreciation of an asset that is state (municipal) property is taken in the manner similar to the decision to write off such property, established in accordance with the legislation of the Russian Federation. Thus, if the depreciated object is a particularly valuable movable property, the recognition of a loss from its depreciation is agreed with the founder. An impairment loss on an asset is included in expenses of the reporting period.

Impairment losses of the CGU asset and the CGU asset are recognized taking into account the specifics provided for in clauses 16.1, 16.2 of the Asset Impairment Standard. These paragraphs state that if the estimated amount of an asset's impairment loss is greater than its carrying amount at the annual reporting date, then the carrying amount of such an asset is reduced to zero, with the corresponding amount being recognized as an expense in the reporting period. An obligation for the amount of such an excess is recognized in accounting in cases established by regulatory legal acts regulating accounting and preparation of accounting (financial) statements.

After an asset impairment loss is recognized, the depreciation rate for the asset is adjusted in connection with the decision made by the accounting entity to adjust the remaining useful life of the asset in such a way as to evenly distribute the revised residual value of the asset over the remaining useful life of the asset, taking into account its adjustment .

Example 3

On the balance sheet of the institution on account 2,101,34,000, there is equipment with a book value of 378,000 rubles. In March 2018, the equipment broke down and is out of service. As of December 1, 2018, the amount of depreciation accrued on the object amounted to 300,000 rubles. During the inventory before reporting, the head of the institution decided to determine its fair value. According to the results of the assessment, such a cost was determined in the amount of 30,000 rubles. The residual value of the equipment as of December 1, 2018 is 78,000 rubles. (378,000 - 300,000). The institution concluded an agreement with a third-party organization, which found that it was not advisable to repair the object in the form of its moral and physical deterioration. The cost of paying for an agreement concluded with a third-party organization is 10,000 rubles.

Based on the available data, the impairment loss of the asset is RUB 38,000. (78,000 - 30,000 - 10,000). The equipment is an asset of the NGDP. Since the residual value of the object exceeds the amount of the loss from asset depreciation (78,000 rubles > 38,000 rubles), the institution, guided by the norms of clause 16.2 of the Asset Impairment Standard, adjusts the residual value of the object and recognizes it as equal to zero.

Recognition of an impairment loss for a unit of GDP is carried out taking into account the specifics provided for in paragraphs 17.1 - 17.7 of the Asset Impairment Standard. It follows from the provisions of these paragraphs that the impairment loss of the CGU unit is distributed in proportion to the residual value of the assets included in the CGU unit. When allocating an impairment loss on an LTF unit, the residual value of the asset that is part of the LTF unit is reduced to its fair value less costs of disposal, if any, or to nil otherwise.

For an asset that is part of a CGU unit, an asset impairment loss is recognized if:

If the value of a CGU unit has not decreased, then no impairment loss is recognized for assets in CGUs that generate cash flows. This rule applies even if the fair value less costs of disposal of an asset in a CGU that generates cash flows is less than the carrying amount at the annual reporting date of that asset.

Impairment testing of the CGU assets included in the CGU unit is carried out before the impairment test of the entire CGU unit. After an impairment test of the CGU assets included in the CGU unit, their residual value is included in the residual value of the CGU unit that is subject to the impairment test.

Impairment loss of the GPE unit is recognized by allocating the amount of the impairment loss of the GPE unit, calculated based on the results of the impairment test of the GPE unit, in proportion to the residual value of all assets of the GPE included in the GPE units.

With respect to the GRT assets that are part of the GPE unit, no impairment loss from the GTU unit is recognized. Amounts of loss from depreciation of a CGU unit that remain unallocated after the procedures set out in paragraphs 17.2 - 17.6 of the Asset Impairment Standard are performed are recognized as a liability in cases stipulated by regulatory legal acts governing accounting and preparation of accounting (financial) statements.

Decreasing the amount of the asset impairment loss

The Impairment of an Asset standard sets out indications for a reduction in the amount of an asset's impairment loss. It follows from the provisions of clause 18 of the aforementioned standard that the recovery of an asset impairment loss is carried out by the accounting entity if, based on the results of the impairment test, there are signs indicating that the asset impairment loss recognized in previous periods no longer exists or has decreased (hereinafter - indications of a decrease in the impairment loss of the asset).

An impairment loss for an asset recognized in prior periods is reversed if the method used to determine the asset's fair value has changed since the last impairment loss was recognised. In this case, the residual value of the asset is increased to its fair value, but up to the amount at which the asset would be carried in the absence of impairment, less depreciation.

Any increase in the residual value of an asset in excess of the asset's original cost less depreciation is a revaluation. Reflection in the accounting of such revaluation of assets is possible only if there are provisions in the regulatory legal acts regulating the maintenance of accounting records and the preparation of accounting (financial) statements that regulate the procedure for revaluation of such assets.

A reversal of an impairment loss on an asset is recognized as income in the current financial year. After recognition (reversal) of an impairment loss on an asset, the depreciation rates for that asset should be adjusted so that the changed residual value of the asset is written off on a straight-line basis over the remaining useful life of the asset.

The recoverable amount of an asset impairment loss in respect of a CGU unit is subject to allocation to the assets included in it, in proportion to the values ​​of the residual value of these assets. It is not allowed to allocate a part of the recovered loss to an ICF asset that creates a useful potential for the CGU unit.

When allocating a reversal of an impairment loss on a CGU unit, the carrying amount of individual assets must not increase in excess of fair value (if determinable) or the carrying amount that would have been determined (net of depreciation) if no loss had been recognized on the asset in prior periods from the impairment of the asset, whichever is less. The amount of the reversal of an asset's impairment loss thus calculated should be allocated on a pro rata basis to other assets within the CGU unit.

In conclusion, we note that the assessment of asset impairment is made by decision of the head of the institution before the preparation of annual financial statements if there are signs of asset impairment. Information about the impairment of an asset is disclosed in accounting forms. Paragraph 31 of the Asset Impairment Standard establishes that for each group of assets, an accounting entity discloses:

the amount of an asset's impairment loss recognized as an expense during the period and the line items in which those asset impairment losses are included;

the amount of the reversal of an asset's impairment loss recognized in income during the period and the line items for which those asset impairment losses were reversed.

This information is provided together with other information disclosed for each group of assets in accordance with the regulatory legal acts governing accounting and preparation of accounting (financial) statements. For example, such information may be included in the reconciliation of the residual value of property, plant and equipment at the beginning and end of the period in accordance with the requirements of the Standard for Property, Plant and Equipment.

The reporting forms also reflect information on the amounts of the impairment loss of an asset (recognised or reversed). Specify (clause 32 of the Asset Impairment Standard):

the events and circumstances that led to the recognition or reversal of an impairment loss on an asset;

the amount of an impairment loss recognized or reversed for an asset;

the group to which the asset belongs, if the provision of such information is provided for by regulatory legal acts regulating accounting and preparation of accounting (financial) statements;

the methods used to determine fair value in the impairment test.

Cash-generating unit (CGU) - the smallest identifiable group of assets that generates cash inflows that are largely independent of cash inflows from other assets or groups of assets.

Corporate assets - assets, other than goodwill, that contribute to future cash flows from both the cash-generating unit in question and other cash-generating units.

Disposal costs - incremental costs directly attributable to the disposal of an asset or cash-generating unit, net of finance costs and income tax expense.

Impairment losses - the amount by which the carrying amount of an asset or cash-generating unit exceeds its recoverable amount.

The recoverable amount of an asset or cash-generating unit is its fair value less costs to sell or value in use, whichever is greater.

Use value - the present value of the future cash flows that are expected to be received from the asset or cash-generating unit.

An asset is impaired if its carrying amount exceeds its recoverable amount. An entity shall assess at the end of each reporting period whether there is any indication that assets may be impaired. If any such indication exists, the entity must estimate the asset's recoverable amount.

Regardless of whether there is or is any indication of impairment, the entity also:

1) checks for impairment on an AS with an indefinite life or not yet available for use, annually by comparing its carrying amount with its recoverable amount;

2) tests goodwill acquired as a result of a business combination for impairment annually.

In assessing whether there is any indication that an asset may be impaired, an entity should consider, at a minimum, the following:

External sources of information

1) there are observable indications that the value of the asset has declined significantly more than expected during the period;

2) significant changes that have adverse consequences for the enterprise have occurred during the period or will occur in the near future in technical, market, economic or legal conditions;

3) market interest rates have increased during the period and this increase is likely to have a material adverse effect on the discount rate used in calculating the asset's value in use and recoverable amount;

4) the book value of the enterprise's net assets exceeds its market capitalization;

Internal sources of information

1) there are signs of moral obsolescence or physical damage to the asset;

2) Significant changes with an adverse effect on the entity have taken place during the period, or are expected to take place in the near future, in the extent and manner in which (or are expected to use) the asset.

3) from internal reporting it is clear that the economic performance of the asset is worse or will be worse than expected, etc.

Indicators of internal reporting that indicate that an asset may be impaired include the fact that:

1) cash flows for the acquisition of the asset, or subsequent cash requirements for its operation or maintenance, significantly exceed the amount originally budgeted;

2) the actual net cash flows or operating profit or loss from the asset is significantly worse than projected figures;

3) there is a significant decrease in net cash flows or operating income compared to the budget, or a significant increase in losses from the asset compared to the budget; or

4) when the amounts of the current period are added to the budgeted amounts for future periods, an operating loss or a net cash outflow is recorded for the asset.

Estimation of recoverable amount

The recoverable amount is determined as the fair value of the asset or cash-generating unit less costs to sell or value in use, whichever is greater.

The recoverable amount is determined for an individual asset, unless that asset does not generate cash inflows that are largely independent of the cash inflows from other assets and groups of assets. If so, the recoverable amount is determined for the cash-generating unit that includes the asset, unless:

1) the fair value of the asset, less costs to sell, is greater than its carrying amount; or

2) the asset's value in use can be estimated to approximate its fair value less costs of disposal, and fair value less costs of disposal can be estimated.

When calculating the value in use of an asset, the following elements are reflected:

1) an estimate of the future cash flows that the entity expects to receive from the use of the asset;

2) expectations regarding possible deviations in the amounts and timing of such future cash flows;

3) the time value of money, represented by the current market risk-free interest rate;

4) the price associated with the uncertainty inherent in this asset; as well as

5) other factors, such as illiquidity, that market participants will take into account when pricing the cash flows that the entity expects to receive from the asset in the future.

Estimating the value in use of an asset includes the following steps:

1) an estimate of the future inflow and outflow of cash associated with the continued use of the asset and its subsequent disposal; and

2) applying an appropriate discount rate to such cash flows in the future.

Estimated future cash flows and discount rates reflect consistent assumptions of price increases that relate to headline inflation.

To avoid double counting, estimates of future cash flows do not include:

1) cash inflows from assets that generate cash inflows that are largely independent of the cash inflows from the asset in question (for example, financial assets such as receivables); and

2) cash outflows relating to liabilities that are recognized as payment liabilities (for example, accounts payable, pensions or provisions).

3) inflows and outflows of cash as a result of financial activities, and

4) receipts or payments related to income tax.

Recognition and measurement of impairment losses

If, and only if, the asset's recoverable amount is less than its carrying amount, the asset's carrying amount is reduced to its recoverable amount. Such a decrease is an impairment loss.

Impairment losses are recognized immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another standard. Any impairment loss on a revalued asset should be accounted for as a reduction of the revaluation amount.

Impairment losses on a non-revalued asset are recognized in profit or loss. However, for a revalued asset, an impairment loss is recognized in other comprehensive income to the extent that the impairment loss does not exceed the surplus from the revaluation of that asset. Such impairment losses on a revalued asset reduce the amount of the surplus from the revaluation of that asset.

After an impairment loss is recognized, the depreciation charge for an asset is adjusted in future periods to allocate the asset's revised carrying amount, less its residual value, if any, on a regular basis over its remaining useful life.

If there is any indication that an asset may be impaired, the recoverable amount must be estimated for the individual asset. If it is not possible to estimate the recoverable amount of an individual asset, the entity determines the recoverable amount of the cash-generating unit to which the asset relates (cash-generating unit of the asset).

The recoverable amount of an individual asset cannot be determined if:

1) the asset's value in use cannot be estimated to approximate its fair value less costs to sell (for example, if the future cash flows from continuing use of the asset cannot be estimated to be negligible), and

2) the asset does not generate cash inflows that are largely independent of the inflows from other assets.

In such cases, value in use, and therefore recoverable amount, can only be determined for the cash-generating unit of the asset. Judgment is used to identify the cash-generating unit of an asset. If a recoverable amount cannot be determined for an individual asset, the entity identifies the smallest set of assets that generates substantially independent cash flows.

Cash-generating units must be identified consistently from one period to the next for the same asset or types of assets, unless a change is justified.

The recoverable amount of a cash-generating unit is its fair value less costs to sell or value in use, whichever is greater. Carrying amount of cash-generating unit:

Includes the carrying amount of only those assets that can be directly allocated or allocated on a reasonable and consistent basis to the cash-generating unit and that will provide future cash flows used to determine the value in use of the cash-generating unit; and

Does not include the carrying amount of a recognized liability unless the cash-generating unit's recoverable amount can be determined without taking into account that liability.

When testing a cash-generating unit for impairment, an entity identifies all corporate assets that relate to the cash-generating unit in question.

Reversal of impairment loss

An entity shall assess at the end of each reporting period whether there is any indication that an impairment loss recognized in prior periods for an asset other than goodwill may no longer exist or may have decreased. If any such indication exists, the entity must estimate the asset's recoverable amount.

In determining whether there is any indication that an impairment loss recognized in prior periods for an asset other than goodwill no longer exists or has decreased, an entity considers external and internal sources of information.

A reversal of an impairment loss reflects the increase in the estimated useful potential of an asset, either from its use or from its sale, since the date the entity last recognized an impairment loss in respect of that asset.

The surplus to the carrying amount of an asset, other than goodwill, that is attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined (net of depreciation charges) if no impairment loss had been recognised for that asset in prior years.

A reversal of an impairment loss for an asset, other than goodwill, is recognized immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another standard. Any reversal of an impairment loss on a revalued asset in accordance with that other standard shall be accounted for as an increase in the revaluation amount.

A reversal of an impairment loss on a revalued asset is recognized in other comprehensive income and increases the revaluation surplus on that asset. However, to the extent that an impairment loss on the same revalued asset was previously recognized in profit or loss, a reversal of that impairment loss is also recognized in profit or loss.

After a reversal of an impairment loss has been recognized, the depreciation charge for an asset is adjusted in future periods to reflect a review of the asset's carrying amount, less its residual value, if any, on a regular basis over its remaining useful life.

A reversal of an impairment loss for a cash-generating unit should be allocated to the unit's assets, other than goodwill, in proportion to the carrying amount of those assets. When allocating a reversal of an impairment loss to a cash-generating unit, the carrying amount of the asset must not increase by more than the lesser of the following:

Its recoverable amount (if it can be determined); and

The carrying amount that would have been determined (net of depreciation charges) if no impairment loss had been recognized for that asset in prior periods.

The amount of a reversal of an impairment loss that would otherwise be allocated to an asset should be allocated proportionately to the unit's other assets, excluding goodwill.

An impairment loss recognized in respect of goodwill is not reversed in a subsequent period.

An entity shall disclose the following information for each type of asset:

1) the amount of impairment losses recognized in profit or loss during the period and the line(s) in the statement of comprehensive income that reflects those impairment losses.

2) the amount of reversals of impairment losses recognized in profit or loss during the period and the line(s) in the statement of comprehensive income that reflects the reversal of those impairment losses.

3) the amount of impairment losses on revalued assets recognized during the period in other comprehensive income.

4) the amount of reversal of impairment losses on revalued assets recognized during the period in other comprehensive income.

Topic 5. Accounting for impairment of assets (IFRS IAS 36)

Determine the allocation of impairment losses in relation to the cash generating unit of the CGU.

Introduction

The purpose of the standard is to establish the procedures that an entity uses to carry its assets at a value not greater than their recoverable amount.

An asset is carried at a value not exceeding its recoverable amount if its carrying amount exceeds the amount that would be recovered from the use or sale of the asset.

In this case, the asset is called an asset whose value has decreased, and

The standard requires an entity to recognize an impairment loss.

The standard defines a number of criteria (indicators) that help the organization to navigate the situation and make a decision on the need to depreciate assets.

Signs of asset impairment

Entities should consider at each reporting date whether there is any indication that an asset may be impaired.

If such indications exist, then a full impairment analysis should be performed in order to calculate the asset's recoverable amount and, if it is less than the carrying amount, to reflect the impairment of the asset.

Regardless of whether there is any indication of impairment, an annual full review is required to:

Goodwill acquired in a business combination;

Intangible assets with an indefinite service life;

Assets not ready for use.

External signs of asset impairment:

During the period, the market value of the asset has decreased substantially more than would be expected as a result of the passage of time or normal use;

Significant changes have occurred or will occur in the near future in the technological, market, economic or legal conditions in which the company operates that adversely affect the position of the organization;

Market interest rates or other market measures of investment returns have increased during the period and these increases are likely to affect

the discount rate that is used to calculate the asset's value in use and, as a result, will result in a decrease in the recoverable amount;

The reporting entity's net asset carrying amount is greater than its market capitalization.

Internal indications of asset impairment:

There is evidence of obsolescence or physical damage to the asset;

Significant changes that adversely affect an entity's position in the extent or manner in which an asset is used, now or in the future. These changes include plans to cease or restructure the business to which the asset belongs, or to sell or liquidate the asset before a predetermined date;

There is evidence from internal reporting that points to

that the current or future economic results of using the asset are worse,

than expected.

Unfortunately, internal reporting data is not always easy to interpret. They are, as a rule, very subjective, and therefore require a more conservative and cautious attitude in the analysis. In fact, if one of the indicators is present, this does not mean that the asset has been impaired. It is necessary to analyze its impact, both on the fair value less costs to sell assets, and on the calculation of discounted cash flows.

Estimation of recoverable amount

The recoverable amount of an asset is determined as the higher of:

Use values;

Fair value less costs to sell.

The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows from its ongoing use only. In this case, the recoverable amount is determined for

the cash generating unit (CGU) to which the asset belongs.

is the amount that could be obtained from the sale of an asset in a transaction between knowledgeable, willing parties, less costs of disposal.

Use value is the present value of estimated future cash flows that are expected to arise from the asset's continued use and disposal at the end of its useful life.

Determining value in use

The calculation of the value in use of assets consists of two stages:

1. Definition and calculation of future cash flows;

2. Discounting these flows.

Forecasting future cash flows should be based on reasonable assumptions; accelerated revenue growth, significant reductions in expected costs, or unreasonably long useful lives of assets should be excluded. In general, the actual results of the recent past may well serve as a basis for forecasting, however, if there has been a sharp increase in sales and production in recent years, it can only be predicted in the short term. In addition, the general indicators of the industry and the organization itself, in terms of cyclicality, maximum and minimum indicators should be taken

into account, as even the most advanced single organization can not show record results for a long time if the industry as a whole is in decline.

When preparing cash flow forecasts, the best expectations of the managers of the organization should be used, but not their most optimistic forecasts. External data, i.e. obtained from sources outside the organization, are considered more reliable than internal data. The most useful internal data is the organization's plans and budgets. Their value increases if they are reviewed and approved by the company's management, and previously prepared plans and budgets do not differ too much from the actual results. Cash flow projections should be based on more modest expectations for periods that are no longer subject to formally approved budgets, as the reliability of these projections is even more questionable.

IAS 36 specifies that positive cash flows must either be constant or decline consistently in periods for which there are no fully developed and approved budgets. In any case, the growth rate of flows cannot exceed a similar long-term indicator for the industry as a whole.

The standard stipulates that only:

Regular cash inflows associated with the normal and ongoing use of the asset;

The residual value of the asset, if any;

The cash outflow required to secure the inflow;

Cash outflow associated with the preparation of an asset for operation.

Accordingly, the following are not included:

By themselves, depreciation charges, since they are not cash costs;

Costs associated with financing the acquired asset. We are talking about the principal amounts of loans and interest payments on them, as well as the payment of accounts payable for the acquisition of an asset. This is because the decision on the method of purchasing an asset (with own funds, a loan, or issuing additional shares) does not depend on how it is used;

Cash flows associated with unused or mothballed assets;

The effect of applying the tax rate. All forecasts should be based on pre-tax inflows and outflows.

Fair value less costs to sell

The best measure of fair value less costs to sell an asset is the price quoted in the contract to sell the asset. If there is no such agreement, but an active market exists, then fair value less costs to sell is determined based on the market price, excluding costs to sell the asset. If there is neither a contract nor an active market, then the price of the asset is determined based on all available information about its value.

Although determining fair value less costs to sell is not difficult in principle, in practice an entity may encounter some problems.

Recognition and measurement of impairment loss

Impairment loss is the amount by which the carrying amount of an asset exceeds its recoverable amount.

If the recoverable amount of an asset is less than its carrying amount, then the latter must be reduced to its recoverable amount. An impairment loss should be recognized immediately as an expense in the income statement.

profit and loss.

If the impairment has affected an individual asset, then it is possible to credit directly the accounting account of this asset, however, in order to preserve information about its historical cost, it is better to create a separate contra-account (depreciation reserve) for this operation, similar to the accumulated depreciation account, or to reflect the impairment directly by increasing the balance by accumulated depreciation account.

Cash generating unit (CGU)

Although it is necessary to analyze the value of a particular asset, it is rarely possible to calculate the cash flows generated by each individual asset. That is why IAS 36 introduces the concept of a cash generating unit.

A cash generating unit is the smallest identifiable group of assets that, through its continued use, generates cash inflows that are largely independent of those from other assets or groups of assets.

If there is any evidence that an asset may be impaired,

then the recoverable amount must be estimated for the individual asset.

If it is not possible to estimate the recoverable amount for an individual asset, then an entity must determine the recoverable amount of the CGU to which the asset belongs. For example, a coal company owns a private railroad used for coal mining activities. A private railroad can only be sold at "scrap value", it does not generate cash inflows from its continuous ongoing use that are independent of the cash inflows generated by other mine assets. The recoverable amount for a private railroad cannot be estimated because its value in use cannot be determined and is likely to be different from "scrap value".

Therefore, the entity estimates the recoverable amount of the CGU to which the private railroad belongs, ie the mine as a whole.

Definition of cash generating unit

To do this, it is necessary to combine assets into groups for which the determination of independent cash flows will be possible. It is very important that these groups should include a minimum number of assets.

In practice, such units can be: a department, a production line, a workshop, for which it is easy to determine the output, as well as the necessary material, labor and general production costs.

It is quite natural to want to combine the entire enterprise into one CGU. Unfortunately, this will only be justified in extremely rare cases. With this approach, there is always a risk that an impaired asset will not be found, since its impairment may be masked by a more efficient use of other assets. In this regard, IAS 36 specifically emphasizes the need for a detailed and very serious approach to the selection and definition of CGUs.

Once the CGUs are selected, they should be consistently defined thereafter, unless there are valid reasons for a change.

Allocation of assets by CGU

In order to determine the carrying value of the CGU, it is necessary to properly allocate assets to the CGU. It may be difficult to include individual assets

(for example: goodwill, corporate assets) that are shared by the company.

The carrying amount of a CGU includes the carrying amount of assets that can be allocated directly or allocated on a reasonable and consistent basis.

Allocation of goodwill acquired in a business combination

Goodwill is the excess of the cost of acquiring an entity over the fair value of its net assets when accounted for using the purchase method.

Goodwill is a payment made by the buyer of a business in anticipation of future economic benefits. Goodwill does not generate cash flows independently of other assets or groups of assets, and therefore the recoverable amount of goodwill as a separate asset cannot be determined.

At the acquisition date, goodwill must be allocated to CGUs that will benefit from acquisition synergies.

Corporate assets are assets, other than goodwill, that contribute to the generation of future cash flows, both of one separate group of assets that are assessed for impairment, and of other cash generating units.

Another difficulty that arises in practice relates to the valuation of corporate assets such as office buildings, a computer center, etc. By themselves, these assets do not generate any identifiable cash inflows, however, it is still necessary to assess the decline in their value.

When performing an impairment test on a CGU, an entity must identify all corporate assets that are related to the CGU under consideration.

Testing a CGU that includes goodwill for impairment

Impairment testing is carried out once a year or as soon as there is an indication that goodwill or CGUs may be impaired.

If goodwill is allocated to the CGU, testing is mandatory at the end of the reporting period.

Accounting for impairment of CGUs

An impairment loss should be recognized for a CGU if its recoverable amount is less than its carrying amount.

The impairment loss must be allocated to reduce the carrying amount of CGU assets in the following order:

1. First, for goodwill allocated to the CGU (if any);

2. Then to other assets of the CGU in proportion to the book value of each asset in the unit.

These decreases in carrying amount should be accounted for as impairment losses.

When allocating an impairment loss, the carrying amount of an asset must not be reduced below the greater of:

Fair value less costs to sell (if determinable);

Use value (if identifiable);

The amount of an impairment loss that would otherwise be allocated to an asset must be allocated pro rata to other CGU assets.

Recovery of loss for an individual asset

The increased carrying amount of an asset due to the reversal of an impairment loss shall not exceed the carrying amount that would have been determined (net of depreciation) if no impairment loss had been recognized for the asset in prior years;

The reversal of an impairment loss on an asset should be recognized in the income statement as profit, unless the asset is carried at a revalued amount (for example, under the permitted alternative method in IAS 16 where the reversal of the impairment loss is credited to equity

"revaluation reserve";

The amount recovered may not exceed the original (historical) cost before impairment, adjusted for depreciation, i.e. the recovery gain cannot be greater than the amount of previously recognized losses, reduced by the amount of depreciation charges recorded for the period after the date the impairment was recognized;

Depreciation charges should be adjusted.

Reversal of impairment loss for CGUs

The reversal of a CGU impairment loss in respect of an increase in the carrying amount of CGU assets should be distributed as follows:

First, reverse the impairment of assets other than goodwill in proportion to the carrying amount of each asset in the CGU;

These increases in carrying amount should then be accounted for as a reversal of impairment losses for individual assets;

However, in allocating a reversal of an impairment loss for a CGU, the carrying amount of an asset must not increase beyond the lesser of:

The recoverable amount of the CGU (if it can be determined);

The carrying amount of the CGU that would have been determined (net of depreciation) had no impairment loss been recognized for the asset in prior years.

Questions for self-examination:

1. Impairment of assets, its definition and signs.

2.Recoverable amount. Fair value less costs to sell. Value in use.

3. Generating unit.

4. Recognition of an impairment loss.

5. Reversal (recovery) of loss from depreciation of assets.

Despite the fact that the concept of impairment of non-current assets is currently absent in Russian accounting, the economic significance of this process is very high, and it is directly reflected in financial statements prepared in accordance with international standards.

Non-current assets in accounting are fixed assets, intangible assets, investment property and long-term financial investments - the so-called. "portfolio investment".

IAS 36 Impairment of Assets refers solely to the accounting for non-current assets and does not apply to the accounting for inventories, assets arising from construction contracts, deferred tax assets, assets arising from employee benefits, or assets classified as held for sale ( or included in a disposal group that is classified as held for sale) because the standards for such assets already contain requirements for their recognition and measurement. Subsidiaries, associates and joint ventures are also subject to impairment testing as long-term portfolio investments. Segments of an entity to be accounted for in accordance with IFRS 8 should be tested for impairment similarly because they have a separate stream of income determined by accounting policies.

Procedure for calculating impairment

According to IAS 36, an impairment is a decrease in the carrying amount of an asset relative to its recoverable amount. In this case, the recoverable amount is understood to be the higher of the two values:

• fair value less costs to sell;
• value in use of the asset.

Fair value less costs to sell is the amount that could be realized from the sale of an asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal, i.e. in fact, this is the open market value, taking into account the costs of sale.

Examples of such deductible costs include legal costs, stamp duty and similar transaction taxes, the costs of removing an asset, and the direct costs of bringing an asset to a condition necessary for sale. However, termination benefits (under IAS 19) and costs associated with downsizing or reorganizing activities after the disposal of an asset are not direct costs of asset disposal and cannot be accounted for. The value in use of an asset (also called cost in use) is defined in a slightly different way.

According to IFRS, for this it is necessary to estimate the cash flow from the use of the asset for 3–5 years (this period depends on the useful life of the asset in question, which is determined by accounting policies or contracts) by two-stage testing, namely: the calculation of the possible reasons for the decrease in profitability of that asset (determining the net cash flow) and estimating the amount of that decrease.

At the first stage, the external causes of the decline in profitability are determined, which include the following:

• significant changes (technology, market structure, the country's economy and legislation (in terms of changes in the tax burden), the emergence of more profitable process technologies, a drop in prices for this type of asset on the market, a ban on this type of activity, etc.);
• changes in interest rates or other factors that affect the amount of discount used in calculating the value in use of an asset (an increase in discount rates reduces the return on the asset when discounting the cash flow);
• establishing the fact that the book value of the company's net assets exceeds its market capitalization, i.e. on the market this asset is much cheaper.

At the second stage, the standard proposes to evaluate the impact of internal causes of a drop in profitability - these are asset downtime, significant repair costs, an excess amount of defects in the machine park, too much electricity consumption, etc.

Thus, when calculating the value in use of an asset, the following factors should be taken into account:

• an estimate of the future cash flows that the entity expects to receive from the use of the asset;
• possible deviations in the amounts and timing of future cash flows;
• the time value of money, represented by the current market risk-free interest rate;
• changes in value associated with the uncertainty (unforeseen costs) inherent in the asset;
• other factors (for example, the market illiquidity of the asset due to obsolescence).

The total estimated loss determines the amount of possible impairment of the asset under test. In this case, the calculation must be carried out taking into account the discounting of future cash flows.

Once fair value and value in use have been determined, the higher of these must be compared to the carrying amount of the asset. An impairment will arise if the carrying amount is higher than the estimated recoverable amount.

Example. The store building has an initial cost of 20 million rubles. and depreciation of 2.3 million rubles. By decision of the owners, the store is closed due to loss of profitability, but the building can be sold or leased to other owners.
The sale is possible for 15 million rubles. (market value), while the legal and technical costs of the sale amount to 600 thousand rubles.
Leasing is possible for 5 years for 1 million rubles. in year. Calculations are carried out for 5 years - for the term of the proposed lease agreement, because cash flow comes from rent.
The general discounting formula for a billing period of n years:

Rent amount x (1 / (1 + discount rate)n).

At a discount rate of 12%, we calculate the discount coefficients:

1st year - 1 / (1 + 0.12) = 0.893;
2nd year - 1 / (1 + 0.12) 2 = 0.759;
similarly 3rd year - 0.71;
4th year - 0.63;
5th year - 0.56.

1st year - 1,000,000 rubles. x 0.893 = 893,000 rubles;
2nd year - 1,000,000 rubles. x 0.795 = 795,000 rubles;
3rd year - 1,000,000 rubles. x 0.71 \u003d 710,000 rubles;
4th year - 1,000,000 rubles. x 0.63 \u003d 630,000 rubles;
5th year - 1,000,000 rubles. x 0.56 \u003d 560,000 rubles.

When added together, the total amount for 5 years will be 3.588 million rubles. Next, you need to determine how much the impairment of assets should be reflected.

1. book value (original cost minus depreciation):
   RUB 20,000,000 - 2,300,000 rubles. = 17,700,000 rubles;
2. fair value (sales value less costs to sell):
   RUB 15,000,000 - 600,000 rubles. = 14,400,000 rubles;
3. value in use over a 5-year period (discounted value of future cash flows).
   According to the above calculations, it amounted to 3,588,000 rubles;
4. recoverable amount (the highest of the amounts calculated in paragraphs 2 and 3) – RUB 14,400,000;
5. loss (recoverable amount minus carrying amount):
   RUB 14,400,000 - 17,700,000 rubles. \u003d -3,300,000 rubles.

Thus, we have determined the amount of impairment of a non-current asset. In accordance with IFRS, the loss (the amount of impairment of the building) will be reflected in the following entry (in brackets are the account numbers according to the Russian accounting system):
Debit Profit(84) - 3,300,000 rubles.
OS loan(01/building).

It is important to emphasize that if a non-current asset does not have a useful life (land, many types of intangible assets, goodwill) and, accordingly, is not depreciated, then its true value should always be determined using impairment testing. As for financial (portfolio) investments, they are also tested for impairment at the end of the period in accordance with IAS 39. traded on an open exchange, financial instruments, then the result of this testing will be the determination of their value on the exchange on the date of testing: if the exchange rate falls, a negative difference in price is formed relative to the value reflected in the accounting, i.e. there is an impairment of these assets.

Note that with an increase in the value of investments, there will be income, which must also be reflected in the accounting. Unfortunately, many Russian companies, not wanting to pay income tax, do not re-evaluate their financial assets, which, if the value of the latter increases, deliberately reduces the overall value of the company.

In the case of valuation of "unlisted" financial instruments (stakes in joint ventures and shares of closed joint-stock companies), their estimated revaluation is necessary, taking into account the profit received from them for the period and the results of the forecast of success (failure) in subsequent periods.

Typically, such estimates are provided by experienced financial advisors or auditors. In accounting, the resulting difference in valuation is reflected similarly to financial instruments listed on the stock exchange:

Debit Profit (84)
Credit Investments (03)

A special calculation method is used in determining the fair value of the so-called. "generating unit".

Cash-generating units and goodwill

A cash-generating unit (CGU) in accounting according to international standards is an accounting object, consisting of several separately determined parts that do not create a specific cash flow, i.e. direct income. As a rule, these parts of the cash-generating unit have their own account or sub-account in the company's accounting for depreciation and repair costs, but without other parts of this unit (individually), they cannot generate income.

A good example is an airplane. Separate sub-accounts take into account the engine, hull, navigation equipment, etc., and each element of the structure of the object has its own useful life, depreciation, repair needs. But there is no flow of profitability from them - the entire flow is created by the aircraft as a whole.

Other examples of CGUs include individual divisions of industrial enterprises, affiliates that do not have an autonomous market for their products, and even subsidiaries, associates and joint ventures in a consolidation system. The question arises: how to assess the impairment of such a CGU and how to allocate the possible impairment of such an asset to its individual parts?

The recoverable amount of an individual asset cannot be determined if:

• the asset's "value in use" cannot be measured as close to its "fair value less costs to sell";
• the asset does not generate cash inflows that are independent of the cash inflows generated by other assets.

In such cases, "value in use" and thus recoverable amount can only be determined for the cash-generating unit as a whole. IAS 36 defines this as follows.

If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of the entire cash-generating unit to which the asset belongs is estimated. At the same time, the full composition of non-current assets included in the CGU is necessarily reflected in the accounting policy and explanations to the company's financial statements.

The determination of the cash-generating unit to which an asset belongs is subjective - it is the professional judgment of an accountant based on knowledge of the entity's accounting structure. If it is not possible to determine the recoverable amount for an individual asset, then it is necessary to determine the smallest set of assets that generates independent cash flows.

Cash inflows are only cash receipts from parties that are not affiliated (affecting the activities of this company). The calculation of these amounts must be legal and justified, and the auditor must control this!

Auditor
The calculation of these amounts must be legal and justified, and the auditor must control this!

Recoverable amount and carrying amount of the cash-generating unit

The recoverable amount of a cash-generating unit, as in the case of a single asset, is equal to the higher of two values: its “fair value (less costs to sell)” and the “value in use” of the unit.

Carrying amount of cash-generating unit:

• includes the carrying amount of only those assets that generate cash inflows used in determining the unit's "value in use";
• does not include the carrying amount of any recognized liability, unless the unit's recoverable amount cannot be determined without taking into account those liabilities.

When assets are grouped together to assess recoverability, it is important that the cash-generating unit includes all non-current assets that generate the corresponding cash inflows and are accounted for as separate units with their own characteristics (depreciation, repair costs, etc.). Then there is the problem of allocating the total amount of the impairment calculated using the above methodology to the individual components of the CGU, since you need to change the accounting values ​​of all elements of this unit.

The accounting structure of a CGU may include "goodwill" - this is part of the investment in a subsidiary in the form of an overpayment for its acquisition. According to IFRS, goodwill is considered a special type of intangible asset (IA) without a useful life.

IAS 36 provides for the following options for such an allocation:

1. goodwill is written off in full, equal to the estimated impairment, and no further impairment is required;
2. if “goodwill” is not fully written off, then the entire amount of the impairment remains “on it”, no further distributions of the loss by elements are required (“goodwill” “takes everything over”, i.e. becomes less), the amount of the balance from goodwill and all other CGU elements in full;
3. If a full write-down of goodwill results in a residual amount of the calculated impairment, it is allocated pro rata to the carrying amounts of all items in the CGU, i.e. all non-current assets, including intangible assets and land. If there are items in the CGU that were initially measured at fair value, they are not subject to such reduction.
4. the situation is reversed: after the next testing, the cost of the CGU increased. Then the reverse operation is performed - amounts are added to the value of assets in proportion to their book value, while "goodwill" is never restored!

Auditor
If there are items in the CGU that were initially measured at fair value, they are not subject to such reduction.

In practice, such calculations are made as follows.

Example (conditional). There is a subsidiary (not an affiliate, but a source of income of the parent company, subject to testing in accordance with IAS 36), and it is necessary to estimate its true value, because market conditions are unfavourable, the income from the subsidiary has markedly decreased and the possibility of impairment exists.

The composition of non-current assets of a subsidiary includes:

• "goodwill" upon acquisition by its parent company in the amount of RUB 1 million;
• a building with a plot of land in the amount of 15 million rubles;
• depreciable intangible assets with a total value of 2 million rubles;
• equipment with a book value of 6 million rubles.

The total book value of the property is 24 million rubles.

Evaluation of profitability from a subsidiary using the two-stage testing method showed a decrease in cash flow from CGUs by RUB 3 million. At the same time, there is a document stating that the land and building are reflected in the accounting at fair, i.e. individually assessed value. This means that when depreciation is distributed to the company's assets, the cost of the land-building complex is not subject to depreciation, it has already been assessed at its true worth.

If there were no indication that intangible assets are depreciable (having a useful life), then they would have to be revalued separately and also accounted for at fair value. Therefore, the amount of impairment in 3 million rubles. should be distributed as follows:

1. goodwill is written off in full as the amount of the impairment exceeds its cost;
2. balance of 2 million rubles. should be distributed in proportion to the book value of the remaining non-current assets (IA and equipment):
   • one part - 500,000 rubles. - at NMA;
   • three parts - 1,500,000 rubles. - for equipment;
3. after calculating the value of the company will be:
   15,000,000 + 1,500,000 + 4,500,000 = 21,000,000 rubles,
   which is valid for 3,000,000 rubles. less than the initial amount.

The amount of the impairment will be shown as a loss:

Debit Profit (84)
Credit The total cost of the investment in the subsidiary, and the elements of the CGU under consideration, will be accounted for at a modified cost.

In this case, it is necessary to make individual entries for each impairment item to obtain the carrying amount of each unit:

Debit Profit - 1,500,000 rubles.
Credit Equipment
Debit Profit - 500,000 rubles.
Credit NMA

In the next accounting period, the cost of intangible assets and equipment are shown already discounted.

Another important question arises: when should I test for impairment?

IAS 36 indicates the need for systematic testing, i.e. the accounting policy of the company records the date of regular testing, and not always on the reporting date, but always at the same time. If there is no observable cause for impairment, then the explanatory note must explain that testing was not necessary. Subsequently, it may turn out that the cash-generating unit has recovered and even increased its cash flow. In this case, a similar recalculation of costs is made, but with an increase, while “goodwill” is not restored. The amount of profit is distributed to the remaining assets (with the exception of those not discounted in the previous period) also in proportion to their book values.

Note that the standard singles out intangible assets without a useful life and goodwill as separate accounting items that are subject to requirements that differ from those for other assets, namely: mandatory impairment testing in current accounting, even without obvious signs of impairment, t .to. they do not have the ability to depreciate, so there is no reliable current assessment of their condition.

Reflection in reporting

Like other standards, IAS 36 requires disclosure in the financial statements of information about the analyzed object. The list of required disclosures is detailed in the relevant section of the standard. Such attention to this issue is due to the fact that IFRS reporting is intended mainly for external users, for whom the fact of recognizing an impairment loss is important for making one or another decision (for example, on investments in this company). This approach is fully consistent with the principle of objectivity in the assessment: reliable reporting must have a truthful presentation (this is one of the qualities of the reliability of reporting required by IFRS). To facilitate disclosure, IAS 36 recommends reporting by subclass of assets, i.e. by groups of assets that may be similar in use in the activities of the company.

The standard also notes that disclosures in the financial statements of assumptions in determining the recoverable amount of an asset are encouraged. Such assumptions can be estimates that need to be developed and reflected in the accounting policy of the company; they are usually individual and should correspond to the immediate structure and activities of this company. At the same time, the materiality threshold specified in the accounting policy is also taken into account (it is determined by each company independently, based on the amount of net assets or turnover): if the impairment calculation gives amounts less than the materiality threshold, no adjustment is necessary, but should be indicated in the explanations that a similar analysis was carried out and it gave such a result.