UK GAAP - Impairment of Assets

The fundamental principle of Section 27 is that an asset cannot be carried in the balance sheet at a value in excess of its recoverable amount, through either its sale or value in use to the entity. The principle may be applied to an individual asset or, where an asset does not generate a separable cash inflow, a group of assets known as a cash-generating unit (CGU).

This concept will be broken down within the module, as per the objectives below, so you are able to apply Section 27 and relevant disclosure requirements.

After completing this module, you will be able to:

• identify the scope of Section 27 and any excluded assets.
• recognise when an assessment for indicators of impairment shall be made.
• describe different indicators of impairment.
• explain the concept of recoverable amount and how best to calculate this.
• account for an impairment loss and subsequent reversal.
• identify the disclosure requirements of Section 27.
• Account for an impairment loss and subsequent reversal.
• Identify the disclosure requirements of Section 27

This module is part of the UK GAAP Library or can be booked as an individual course. To book the full library click here.