Page 14 - Finac1 Test 3 slides - 3. Impairment of Assets

TEST 3 PREPARATION

How to calculate an impairment loss?

• Value in use

• Estimating the value in use of an asset involves the

following steps:

• estimating the future cash inflows and outflows to be derived

from the continuing use of the asset and from its ultimate

disposal; and

• applying the appropriate discount rate to these future cash

flows. (IAS 36.31)

Discount rate

• The discount rate (or rates) shall be a pre-tax rate

14