MFRS 136 Impairment of Assets seeks to ensure that an entity's assets are not carried at...

 

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MFRS 136 Impairment of Assets seeks to ensure that an entity's assets are not carried at more than their recoverable amount (i.e. the higher of fair value less costs of disposal and value in use). Impairment test is important especially in the context of financial reporting quality in that it requires the exercise of considerable management judgement and reporting discretion. There are many factors which can affect the quality of impairment accounting and one of it is valuation issue. Required: Discuss the importance and significance of the valuation issue when conducting an impairment test under MFRS136 Impairment of Assets. MFRS 136 Impairment of Assets seeks to ensure that an entity's assets are not carried at more than their recoverable amount (i.e. the higher of fair value less costs of disposal and value in use). Impairment test is important especially in the context of financial reporting quality in that it requires the exercise of considerable management judgement and reporting discretion. There are many factors which can affect the quality of impairment accounting and one of it is valuation issue. Required: Discuss the importance and significance of the valuation issue when conducting an impairment test under MFRS136 Impairment of Assets.

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When triggering events develop such as covid19 pandemic the impairment testing becomes necessary It ... View the full answer