Impairment of Assets in Financial Accounting

Running head: FINANCIAL ACCOUNTING
Financial accounting
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FINANCIAL ACCOUNTING
Table of Contents
Introduction:...............................................................................................................................3
Discussion:.................................................................................................................................3
Evidences depicting the assets impairment:...............................................................................3
Identification of the process in determining the assets impairment:..........................................5
Information required in determining the assets impairment:.....................................................6
Evaluating the management flexibility in determining the assets impairment:.........................7
Conclusion:................................................................................................................................8
References list:...........................................................................................................................9

FINANCIAL ACCOUNTING
Introduction:
The report is prepared to identify the areas of concern when preparing the financial
statement of the Myer Holding limited for the financial year ending 2019. In this regard, the
report demonstrates the issues that are associated with the impairment of assets. The issue
associated with the impairment is addressed with reference to the AASB 136 and drawing
special attention to the media release by the ASIC (Australian securities of Investment
commission) on the major changes affecting the reported net assets and profits reported for
the reporting on June 30th, 2018 (Cao et al., 2018). For the purpose of analysis of the
impairment testing of the Myer Holding limited, the evidences that require the company to
conduct impairment testing of assets have been depicted. In addition to this, the process
required to determine the impairment of asset is also addressed in the report. The
determination of the impairment of assets has also been explained in terms of the flexibility
of the management of Myers Holding Limited.
Discussion:
Evidences depicting the assets impairment:
The accounting standard of assets impairment that is AASB 136 requires the entity to
prescribe the procedures which is applied by the entity to ensure that the carrying value of
assets is no more than its recoverable amount. An assessment of the indication whether the
assets require impairment should be done by the entity and it is required to estimate the assets
recoverable amount when there exist the indication of impairment. In accordance with the
paragraph 80-99 of the AASB 136, the goodwill acquired in the business combination should
be tested for the impairment on annual basis (iasplus.com, 2019).