Comparing recoverable amount with carrying amount
Insights into MFRS 136This article discusses when there are exceptions to the rule of comparing recoverable amount with carrying amount, which is step 5 in the impairment review process.
Step 6 of applying the guidance in MFRS 136 relates to recognising or reversing and impairment losses. This article focuses on recognition of impairment losses.
MFRS 136 ‘Impairment of Assets’ specifies the accounting for impairment reviews. There are some detailed requirements of MFRS 136 that are complex and sometimes difficult to interpret and therefore are challenging to apply when preparing financial statements.
The articles in our ‘Insights into MFRS 136’ series have been written to assist preparers of financial statements and those charged with the governance of reporting entities understand the requirements set out in MFRS 136, and revisit some areas where confusion has been seen in practice.
Step 6 of applying the guidance in MFRS 136 as set out in our article ‘Insights into MFRS 136 – Overview of the Standard’ and relates to recognising or reversing and impairment losses. This article focuses a part of this step; recognition of impairment losses.
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We hope you find the information in this article helpful in giving you some insight into MFRS 136. If you would like to discuss any of the points raised, please do not hesitate to contact us.
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