This free, guided checker walks your finance team through the key decision points for IAS 36 Impairment and CGU Assessment. Answer a few questions to see the likely treatment and the evidence to document.
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This tool is a high-level IFRS screening aid for general information only and is not accounting, audit or legal advice. Conclusions require entity-specific evidence and judgement - confirm the treatment with your advisor.
Here is what the checker asks and why each step matters. Prefer to talk it through? Contact us and we will help directly.
Goodwill, indefinite-life intangibles, and intangibles not yet available for use are tested annually irrespective of indicators (IAS 36.10). The annual test may be performed at any time during the year provided it is performed at the same time each year (IAS 36.96), and an indicator arising between annual tests still triggers an interim test (IAS 36.9).
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Official guidance: IFRS issued standards
Consider market values, rates, performance, obsolescence, damage, restructuring, branch wind-down plans, and adverse operating evidence against approved budgets.
No IAS 36 test is triggered for indicator-only assets at this date; document the IAS 36.12 indicator review and refresh it at each reporting date (IAS 36.9).
Official guidance: IFRS issued standards
After applying equity method, assess whether objective evidence indicates the investment is impaired and compare recoverable amount to carrying value, recognising any charge in share of profit or loss.
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Official guidance: IFRS issued standards
Use the lowest level at which cash inflows are largely independent, while maintaining consistent CGU boundaries aligned with internal monitoring.
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Official guidance: IFRS issued standards
Recoverable amount is the higher of fair value less costs of disposal and value in use (IAS 36.18); if either measure exceeds carrying amount, the asset is not impaired and the other measure need not be estimated (IAS 36.19). For CGU tests, determine the unit's carrying amount on a basis consistent with the way its recoverable amount is determined (IAS 36.75).
Recognize an impairment loss for the excess of carrying amount over recoverable amount, generally in profit or loss (IAS 36.59-60); for a CGU, allocate first to goodwill and then pro rata to the other assets (IAS 36.104). No impairment loss is recognized because recoverable amount supports the carrying value (IAS 36.59); retain headroom and sensitivity documentation.
Official guidance: IFRS issued standards
VIU reflects present value of future cash flows from the asset or CGU, using assumptions consistent with approved budgets and market evidence rather than generic group rates alone.
Complete the VIU methodology alignment - pre-tax cash flows excluding financing and tax (IAS 36.50) discounted at a pre-tax, asset-specific rate (IAS 36.55) - before concluding on associate or CGU impairment.
Official guidance: IFRS issued standards
The allocation level must reflect internal monitoring and cannot be larger than an operating segment before aggregation.
Allocate goodwill to the benefiting CGU or CGU group before completing the impairment test; IAS 36.80 requires allocation at the lowest level monitored for internal management, no larger than an operating segment.
Official guidance: IFRS issued standards
Consultation-backed impairment workpapers document headroom sensitivities on terminal growth and discount rates, especially where branch wind-down or associate losses reduce future cash flows.
Complete the sensitivity analysis before impairment sign-off; IAS 36.134(f) requires disclosure where a reasonably possible change in a key assumption would cause carrying amount to exceed recoverable amount.
Official guidance: IFRS issued standards
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