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Evidence required for impairment testing of Myer's asset

   

Added on  2020-02-24

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Running head: ACCOUNTING STANDARD AND REGULATIONAccounting standard and regulationName of the studentName of the universityAuthor note
Evidence required for impairment testing of Myer's asset_1
1ACCOUNTING STANDARD AND REGULATIONTable of Contentsa.Evidence required for impairment testing of Myer’s asset..................................................3b. Procedures required to be addressed for determination of impairment...............................4C.Information required for determination of impairment.......................................................5d. availability of flexibility from the management for determination of impairment...............6Reference....................................................................................................................................7
Evidence required for impairment testing of Myer's asset_2
2ACCOUNTING STANDARD AND REGULATIONAASB 136 and IAS 36 Impairment of assets assure that an organization’s asset is notwritten in the financial statement at the value which is more than its recoverable amount. Therecoverable amount for the asset is higher among the value in use and the fair value less thedisposal cost. Only exception to this is some intangible assets and the goodwill. All theorganizations are required to conduct the test for impairment of its assets if there is anyindication that the asset will be impaired. Further, the test can be carried on for the cashgenerating unit where the asset does not create any cash flow which is widely independent ofthose of the other assets (Linnenluecke et al. 2015). An organization shall assess at end of the each accounting period that whether anyindication exists there for the impairment of any asset and if any indication is there, then therecoverable amount of the asset shall be measured. Various indications for impairment ofassets are as follows –External sources –Reduction in the market value of the assetNegative changes with regard to markets, laws, technologies or economiesIncrease in the interest rate of the marketHigher level of net asset of the company as compared to market capitalizationInternal sources –Physical damage or obsolescenceThe asset is held for disposal or it is idle or part of the asset is restructuringWorse performance as compared to the expectationa.Evidence required for impairment testing of Myer’s assetFlow of the asset – it has been recognized from the given data flow of the companythat the flow for all the stores of the company is either stable or has increased and fornone of the asset any reduction trend is found for the past one year period. Thereforeno indication of impairment is there.Asset base – from the asset base of the company is recognized that the asset base forall the assets has not altered much and all the assets are maintaining more or less thesame percentage of contribution towards total assets for last few years. Therefore, noindication of impairment is there (Malone, Tarca and Wee 2015).
Evidence required for impairment testing of Myer's asset_3

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