Journal of Accounting and Management Information Systems (JAMIS)

Reconsiderations on the impairment of assets

7/2004 ,   p31..39

Camelia Iuliana LUNGU

Keywords:   impairment of assets, recoverable amount, assets evaluation, recognition

As defined by IAS 36 Impairment of assets, an asset is impaired when its carrying amount exceeds its recoverable amount. Broadly speaking, the notion of impairment refers not only to the impairment of a value but also to the time diminishing of the value because of the internal and external sources. We assert within our article that the method in which depreciation is recognized directly as a diminishing of an asset is supported by the idea that the asset must be valued at the fair value. Nevertheless, a weak point of this accounting treatment is the strong subjectivism.