Application of Professional Judgment on Impairment Testing - BHP Billiton

APPLICATION OF PROFESSIONAL
JUDGMENT
ON IMPAIRMENT TESTING
BHP BILLITON

INTRODUCTION
 Professional judgment essential to fulfilment of
accounting standard (Deegan, 2011)
 Enables logical steps
 Choosing various other alternatives
 Consistent analysis

ROLE OF PROFESSIONAL JUDGMENT IN
ACCOUNTING
 Analyzing the situation of the organization
 Ensuring proper decisions and strategies
 Leads to maintenance of good relations with
stakeholders
 Recording the transactions
 Ensuring reliability

RECOGNITION AND MEASUREMENT
BHP Billiton
 The impairment test is done on an yearly basis
(BHP Billiton, 2018)
 Applies to goodwill and other assets
 Impairment denotes a permanent reduction in
the assets value (McKaig, 2011)