impairment summary

Could someone who understands this create a impairment summary? For assets, equity accounting, goodwill, etc? Thanks

Long lived Assets:


Compare to: Max(Sell price - Costs, PV of future CFs)

Impair to: Above, Loss in I/S

Revaluation possible up to previouse impairment

If revaluation greater than first book value record eccess goes in OCI


Compare to: Future undiscounted CFs

Impair to: Fair value, Loss in I/S

No revaluation possible



Compare to: Sell - costs

Impair to: Above

Revaluation possible up to previouse impairment


No reval possible


Both methods distribute their Goodwill to units, its on a by unit basis


Compare to: Recoverable ammount

Impair to: Above

When Goodwill = 0, impair the unit to the extend of what haen’t been absorbed by the GW


Compare to: Fair price

Essentially same results except they are first calculating the implied GW from the Fair Price and then reducing the GW of the unit in respect.

Main difference is that the unit is not impacted if the GW = 0 (Might be why they follow this process which is essentially equal to the IFRS with the impairment limited to GW)

Have a very special saturday night,

A few additional points: US GAAP allows for revaluation when the asset is reclassified as held-for-sale.

For impairment in US GAAP, you use either the fair value (if given), or the PV of future cash flows.

For inventory, in US GAAP, the replacement cost is between the net realizable value (i.e. selling price - selling costs - completion costs) and NRV-profit margin.

For Goodwill, IFRS uses cash generating unit, while US GAAP uses reporting unit.

thank you… this saturday night, visions of impairment will circle in my head :slight_smile: