Convergent and divergent views concerning the impairment of assets
8/2004 , p95..102
Author(s):
Raluca GUŞE
Keywords:
recoverable amount, measurement, carrying amount, value in use, discounted cash-flow, impairment test, impairment loss, regognition, derecognition
Abstract:
Accounting for long-term assets represents an area where the chosen measurement basis has an important impact on the value recognised in the financial statements. Such assets are often impaired, due to different factors, including competition and technological innovations. Investors, creditors and financial analysts are usually surprised by the sudden and significant impairment of long term-assets, therefore the need for an accounting standard regarding measurement, recognition and derecognition of an impairment loss that requests companies to report any occurrence of such losses. Different opinions and standards issued by accounting regulators are presented in this paper, in an attempt to underline the most debated upon subjects.
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