IAS 36 Impairment of Assets prescribes procedures to ensure that assets are carried at no more than their recoverable amount and provides guidance on required disclosures. The standard specifies when impairment losses are to be recognized and the conditions under which such losses should be reversed.
IAS 16 Property, Plant and Equipment, and IAS 38 Intangible Assets, require that impairment losses be reflected in the carrying value of assets. IAS 36 is the standard that specifies how an impaired asset would be identified, and how an impairment loss would be determined.
The objective of IAS 37 Provisions, Contingent Liabilities and Contingent Assets is to ensure that provisions, contingent liabilities, and contingent assets are recognized based on appropriate criteria and measured using appropriate bases. Furthermore, the standard aims to ensure that the notes to financial statements provide sufficient information so that users can understand the nature, timing, and amount of any provisions, contingent liabilities, and contingent assets. The key underlying principle is that a provision should be recognized only when a liability exists; accordingly, planned future expenditures are not recognized as provisions or contingencies, even if the board of directors has authorized them.
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