Recoverable amount should be determined for the individual asset, if possible. Recoverable amount is the amount of asset's fair value less net selling price or the value in use whichever is higher. An asset's carrying amount is SR25,000. below for more details). A loss on impairment of an indefinite - life intangible asset is the difference between the asset's A. recoverable amount and the expected future net cash flows B. carrying amount and its recoverable amount O c. book value and its fair value OD. The recoverable amount of the office building is $7,270,000 because value in use (present value of expected cash flows) is higher than the fair value of $6,650,000 ($7,000,000 - … ASC 360 provides general guidelines as to when an asset (asset group) should be tested for impairment. the higher of fair value less costs of disposal and value in use) for the individual asset, then determine recoverable amount for the asset's cash-generating unit (CGU). The CA will generally include the ROU asset value and the lease liability. [IAS 36.66] If it is not possible to determine the recoverable amount (i.e. recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). The latter is the present net worth of the asset or cash-generating unit (CGU). If it is determined that an asset is impaired, the amount of the impairment is equal to the difference between the carrying amount of the long-lived asset and the Fair Value of the asset. cash flow. to the firm. Successive revaluations. 3 ’ valuation approach This basic accounting equation “balances” the company’s balance sheet, showing that a company’s total assets are equal to the sum of its liabilities and shareholders’ equity. If there is a strong indication that the recoverable amount will drop significantly, the asset impairment test must be performed. An asset's recoverable amount is equal to: A non-current asset held for sale should be measured at: As per IFRS 5 an entity shall measure a non-current asset (or disposal group) classified as held for sale at ., which one of the following? If an entity uses a ‘free . lease liabilities. Its fair value less costs of disposal is £15,000 and its value in use is £19,000. Under IAS 36, the recoverable amount is the higher of the asset’s fair value less cost to sell and its value in use. The recoverable amount is the greater of the asset's value in use (present value of future values) or net realizable value. An asset's recoverable amount is equal to: An asset's carrying amount is £25,000. Amount (CA) and the Recoverable Amount (RA) of a CGU in an IAS 36 impairment calculation. Example If the company intends to sell the asset, the recoverable amount is equal to its fair value less the cost of disposal. 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