Financial reporting under IND AS requires impairment assessment of cash generating units (‘CGU”). The assets are to be carried at not more than their recoverable amount. An asset is said to be carried more than its recoverable amount if it exceed the amount to be recovered through use or sale of the asset. In such scenario, an asset is said to be impaired and the entity is required to assess the impairment loss.
Likewise, initial recognition, goodwill and indefinite-lived intangible assets are tested for impairment at least annually, or upon the occurrence of a triggering event suggesting diminution in the value of an intangible asset.
Impairment Analysis provides guidance as per IND AS 36 for the re-measurement of tangible assets, intangible assets or goodwill pursuant to the financial reporting requirement under IND AS 38.
Goodwill is tested at a cash generating unit (CGU) level and is a single step test comparing the carrying value of the CGU to its recoverable amount, which is the higher of Value in Use or Fair Value Less Costs of Disposal.
Transique Valuation Advisors has developed an in-depth understanding of the impairment valuation requirements, as well as the key areas of concern to satisfy the auditors by explaining the key valuation aspects. Our deep expertise enables us to assist management in identifying areas of impairment risk, while navigating complex corporate structures and their underlying legal entities and/or business divisions.
We can assist you with a variety of issues in the impairment testing of goodwill and indefinite-lived intangible assets as well as tangible assets, including: