18 January 2013

IASB publishes Exposure Draft: Recoverable Amount Disclosures for Non-Financial Assets

The IASB published for public comment an Exposure Draft of proposed modifications to the disclosures in IAS 36 Impairment of Assets for the measurement of the recoverable amount of impaired assets. The IASB requests comments on these proposals by 19 March, 2013.

The IASB published the Exposure Draft to set out proposed modifications to the disclosures in IAS 36 Impairment of Assets for the measurement of the recoverable amount of impaired assets. Those disclosure requirements were introduced by IFRS 13 Fair Value Measurement, issued in May 2011.

When developing IFRS 13, the IASB decided to amend IAS 36 to require the disclosure of information about the recoverable amount of impaired assets, particularly if that amount is based on fair value less costs of disposal. However, it has come to the IASB’s attention that some of the amendments made to IAS 36 have resulted in the requirement being more broadly applicable than the IASB intended. In particular, the IASB had originally intended that the amendment would require an entity to disclose the recoverable amount of an asset (including goodwill) for which an impairment loss was recognised or reversed during the reporting period. However, instead, an entity is now required to disclose the recoverable amount of each cash-generating unit for which the carrying amount of goodwill or intangible assets with indefinite useful lives allocated to that unit is significant when compared to the entity’s total carrying amount of goodwill or intangible assets with indefinite useful lives. This Exposure Draft proposes amendments to IAS 36 that would better represent the IASB’s intention for those disclosure requirements.

In addition, one of the amendments proposed in this Exposure Draft overlaps with an amendment to IAS 36 that had been proposed by the Exposure Draft Annual Improvements to IFRSs 2010–2012 Cycle published in May 2012. That Exposure Draft proposed an amendment that would require an entity to disclose the discount rate that was used in a present value technique in order to determine the recoverable amount of an impaired asset, regardless of whether that recoverable amount was based on fair value less costs of disposal or value in use. That proposal has been incorporated into this Exposure Draft and the IASB is not requesting comments in response to this topic.

Press release

Exposure draft

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