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Accounting Standards and Regulations- Doc

   

Added on  2020-02-24

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Running head: ACCOUNTING STANDARDS AND REGULATIONS Accounting Standards and RegulationsName of the StudentName of the UniversityAuthor’s Note
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1ACCOUNTING STANDARDS AND REGULATIONSTable of ContentsA. Required Evidence for Myer’s Asset Impairment Testing.........................................................3B. Required Procedure for the Determination of Impairment.........................................................3C. Required Information for Impairment Determination................................................................5D. Availability of Flexibility from Management for Impairment Determination...........................6References........................................................................................................................................8
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2ACCOUNTING STANDARDS AND REGULATIONSAccording to the AASB 136 and IAS 36 rules of Impairment, business organizations donot have the right to write down the assets in the financial statements in a value that is higherthan its recoverable amount (Guthrie & Pang, 2013). The recoverable value of the assets is moreamong the used value and the fair value is lower than the disposal cost. Some intangible assetsand goodwill are the exceptional case. In case the organizations can get the indication of theirasset impairment, it is required for the organizations to conduct the test of impairment. In casethe assets are not able to generate any cash flow, then the test can be conducted for the cash-generating unit and this process is largely independent compared to the other assets.At the end of the financial years, the business organizations need to assess whether thereis any indication of asset impairment. In case, there is any indication about asset impairment,business organizations need to measure the recoverable amount. Different types of indicationscan be seen for asset impairment (Linnenluecke et al., 2015). They can be categories in externalsources and internal sources.External SourcesReduction in the asset market valueNegative changes in various aspects like laws, markets, economics and technologiesMarket interest rate increaseHigher amount of net assets of the companies when compared to market capitalizationInternal SourcesCase of obsolesce or physical damageThe asset is die for disposal or the asset is idle for restructuringNegative performance of the company
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