Want to know more about IAS36?
Impairment of assets, a subject you may never have explored before, or is it one you have recently come across and would like to know more about? In either case, you have come to the right place in this article. In this article, we explain what IAS36 is and where it can take you. Can’t you wait any longer to learn more about this subject? Then read on in this article and find out what IAS36 is all about!
What is IAS36 and what does it have to do with?
IAS36 or International Accounting Standard 36 is an impairment test, which is translated into Dutch as impairment test. This test is used by companies or performed to find out whether tangible fixed assets are impaired. To get a clearer idea of what this entails, we will first explain what tangible fixed assets are. Companies have certain assets that are determined to be necessary for a period longer than one year. You can think of PCs, machines, buildings or means of transport. These assets or products are used for a long period of time during business operations. All resources that fall under tangible fixed assets must be economically owned by the company; lease products are therefore excluded. Now that we know what kind of products or assets IAS36 applies to, it is important to know what an impairment is. In company accounting, it is important to look at the value on the balance sheet compared to the actual value. If a product or several products have increased or decreased in value, and this is not recorded in the accounts, one speaks of an impairment. However, every entity is obliged to assess during each report whether there are any causes or indications of possible impairment of these tangible fixed assets. Below are a number of possible indicators that should be examined:
Information from external sources:
- Decrease in market value
- Increase in market value
And you can speak of information from internal sources:
Reduction in asset performance due to damage
As you can read above, IAS36 is quite a tricky subject to talk about without having knowledge of it. When performing such an investigation, the rules are very strict and it is important to work carefully. Do you have any more questions after reading this article and would you like to provide yourself with more information on IAS36? Then read on in the last paragraph.
Where can I find more information on IAS36?
After reading this article, it may have become clear to you what IAS36 is. If this is not the case, it is good to know where you can find more information about it. At www.annualreporting.info they go much deeper into this subject and you can get even more information. Would you like more information and to know all the ins and outs? Then go to the website of annualreporting and delve into it! Here you can find all the relevant information about IAS. You can also ask questions. So, if something is unclear, they can help you out and answer your questions!
