Difference between Long asset Impairment and Asset revaluation?

3 posts / 0 new
Last post
Gordon_Gekko's picture

I always get confuse when this subject pop-up.  In study session 5 : Long lived asset, they talks first about asset impairment and impacts on B/S and I/S. Then, they talk about asset revaluation. I can’t understand what’s the difference between these 2. Can someone help?

Reason #2: No Expiration Date. You get free updates until you pass.
Wojtek's picture

Revaluation is a matter of accounting policy. Under IFRS companies may choose to follow a policy of revaluing some of their long-lived assets (usually land and buildings) to fair value instead of reporting them under the traditional historical cost basis.

Impairment is not a matter of accounting policy or choice. All companies need to periodically check if their long-lived assets are not carried at an amount which exceeds the expected benefits to be derived (recovered) from either using or selling the asset. If this is the case, the asset is deemed to be impaired and its carrying amount must be reduced or written-down.

regards

Gordon_Gekko's picture

Nice,

Thanks again

Subscribe toComments for "Difference between Long asset Impairment and Asset reval...