Asset Impairments

An asset is impaired when the carrying amount of the asset exceeds its recoverable amount.

At each balance sheet date you should assess whether an asset is impaired. If there is any indication the asset is impaired, you should:

• Estimate the recoverable amount of the asset.

• If the recoverable amount of the asset is less than its carrying amount, reduce the carrying amount of the asset to its recoverable amount.

  This reduction is called impairment loss.

Estimate the Recoverable Amount

Estimate the recoverable amount by determining the higher of the net selling price and the value in use.

In some cases, it isn't possible to estimate the recoverable amount of an individual asset. You should:

• Determine the recoverable amount of the cash-generating unit to which the asset belongs.

• Calculate the impairment loss at the cash-generating unit level.

• Allocate the calculated impairment loss proportionately to all of the assets in the cash-generating unit.