Revaluation and Impairment of Assets: Analysis of Two Journal Articles

Microsoft
REVALUATION AND IMPAIRMENT OF LOOSES
Impairment loss and revaluation of assets
University Name-

Executive Summary
This report analysis the two different journal articles which focuses on the impairment
loss and revaluation of the assets of company. The revaluation and impairment loss is determined
with a view to divulge the true and fair view of the assets of the organization. In this report,
accounting standards and rules given under IAS-136 has been followed to determine the
impairment loss on the cash generating units of organization.

Table of Contents
Executive Summary.....................................................................................................................................1
Introduction.................................................................................................................................................2
Explanation of selecting these articles........................................................................................................2
Discussion about the similarities and differences in the findings of the two studies..................................3
Two (2) major implications of their research findings.................................................................................4
Conclusion...................................................................................................................................................6
References...................................................................................................................................................7
Appendix.....................................................................................................................................................9
Two selected articles...................................................................................................................................9
Impairment test.......................................................................................................................................9
Revaluation..............................................................................................................................................9

Introduction
This report reveals the analysis of two articles on the revaluation and impairment loss.
Revaluation is an adjustment which shows the current market value of assets. The revaluation
adjustment includes two type of adjustment that is appreciation and depreciation in the value of
assets. The reason for revaluation is to reflect the up-to-date market value of assets, when
preparing for the sale of an assets to another company, to replace the fixed assets when are
available. However, while processing the impairment loss or revaluation of the assets, company
uses the cash generating units and goodwill so that the same loss could be charged. The
impairment test is implemented on the periodical basis to identify the right value of the recorded
assets and liabilities of company and reevaluate the assets at its right value.
Explanation of selecting these articles
These two articles have been selected as it reveal the analytical approach and depicts the
impairment accounting standards which needs to be followed by listed company to identify the
right value of the recorded assets and liabilities. These two topics impairment and revaluation
both are interrelated to each other and helps in revealing the right value of the recorded assets
and liabilities. . The revaluation and impairment loss computation is based on the AASB-136
accounting rules. The impairments loss is determined as loss which is computed by deducting the
value of the assets from its book value. It is analyzed that when revaluation shows increase or
say appreciation in the value of an assets then it is not recorded in the income statement but that
gain shows in the equity account and that surplus called revaluation surplus. On the other hand,
when there is a decrease in the value of assets then the losses should be written off .If there is no
surplus or loss is greater than surplus then in this situation it is treated as an impairment loss.
Cash generating units is also used by company in deducting the impairment loss which company
has been facing in its business. It is analyzed that the cash generating units are those assets which
are creating the value of the business (Dinh, Kang, Morris, and Schultze, 2018).