Impact of Covid 19 on IAS 36 Impairment losses

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Influenza. Impact of Covid 19 on IAS 36 Impairment losses.

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What is an impairment loss?. An impairment loss can defined as the carrying amount of a CGU(Cash-generating unit) or asset that exceeds its recoverable amount. The recoverable amount is the higher of Fair Value less cost to sell and; Value in use..

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IAS 36 Determining the recoverable amount > of:. The Fair value is the price that would have been received on the asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Impact: Entities have different year end and the value that would have been obtained at a certain point time during covid would be substantially lower than what would have been received at previous dates. Therefore, resulting in a lower recoverable amount thus indicating high impairment losses..

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IAS 36 Disclosure. 5. IAS 36 contains considerable disclosure requirements. The calculation of impairment requires a significant amount of reliance on assumptions. These assumptions arouse due to certain situations and events. And the objective of this IAS 36 is to communicate these significant situation or events that occurred and in this case how Covid 19 impacted impairment testing..

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6. 1. BDO IFR Advisory Limited.2020. Impairment Implications of Covid-19 (IAS 36 Impairment of an asset, July 2020.[Online].Available at: [Accessed 8 May 2022]. 2. PWC.2020.In depth A look at current financial reporting issues, 17 March 2020.[Online].Available at: [Accessed 10 May 2022]. 3. Koppeschaar, Z.R., Rossouw, J., Sturdy, J., van Wyk, H.A., Gaie-Booysen, F.F., Papageorgiou, K., Smith, C., van der Merwe, C.M. and Schmulian, A. 2019. Descriptive Accounting IFRS focus . 21 st ed. Durban:Lexis Nexis..