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Corporate Accounting Assignment: Impairment Loss

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Added on  2020-05-28

Corporate Accounting Assignment: Impairment Loss

   Added on 2020-05-28

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Running head: CORPORATE ACCOUNTINGCorporate AccountingName of the Student:Name of the University:Authors Note:
Corporate Accounting Assignment: Impairment Loss_1
CORPORATE ACCOUNTING1Table of ContentsPart A: Impairment loss for cash generating units excluding Goodwill........................2Part B: Preparation of journal entries for any impairment loss occurring in 30 June2015..............................................................................................................................5Reference:....................................................................................................................7
Corporate Accounting Assignment: Impairment Loss_2
CORPORATE ACCOUNTING2Part A: Impairment loss for cash generating units excluding GoodwillImpairment loss FB the carrying amount of an asset or cash generating unit,which exceeds the recoverable amount. This directly indicates that the carryingamount is recognized after deducting any accumulated depreciation and impairmentloss of an asset present within the organization. On the other hand, Glaum et al.(2013) criticizes that rigorous implementation of the impairment loss could decreaseactual net profit of the organization. For example, the identification of recoverableamount, net selling value, carrying amount and depreciation amount could be usedin identifying the actual impairment loss faced by the organization. The impairmentloss is mainly reflected in balance sheet and income statement of the organizationwhere total asset value is reduced. Under IAS 36, relevant method of recognition forimpairment loss is depicted, which could be used by the organization during theformulation of their annual report. In this context, some researchers mentioned thatimpairment loss is mainly a decrease in the net carrying value that exceeds futureundisclosed cash flow of the asset (Iasplus.com 2018).Recognition method can be used in accordance with IAS 36, which allows theorganization to identify the impairment loss of the Asset. The impairment loss ismainly identified when the carrying amount of asset is greater than the recoverableamount. Impairment loss is directive reflected in comprehensive income of theorganization, where fair valuation method is used in accordance with IAS 16standard. Therefore, it could be understood that for identifying impairment losscomparison between carrying amount and recoverable amount of an asset needs tobe conducted by the organization.Furthermore, with the help of IAS 36 impairmentof assets, organizations are able to ensure that assets are not carried more than the
Corporate Accounting Assignment: Impairment Loss_3

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