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13 October 2010

EFRAG's DCL on the Interpretations Committee's rejection decision on IAS 36 Impairment of Assets - calculation of value in use


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EFRAG empfiehlt dem Interpretationskommitte den Verweis auf "rarely be appropriate " aus dem Wortlaut für die Ablehnung zu streichen. EFRAG empfiehlt auch eine Änderung in der Formulierung für die Ablehnung um zu verdeutlichen, dass ein DDM verwendet werden könne, soweit dies mit den Anforderungen gemäß IAS 36 in Einklang steht.


The rejection notice in respect to the issue specifies that ‘…calculations using DDMs would rarely be appropriate when calculating value in use of a CGU in consolidated financial statements.’ The Interpretations Committee supported its tentative conclusion by explaining that it believes that the cash flows used to calculate value in use of a CGU in the consolidated financial statements may be different from the cash flows used to calculate value in use of an investment in the separate financial statements. It added that the cash flows associated with liabilities are usually excluded from the value in use of a CGU. It concluded that the current principles in IAS 36 relating to the calculation of the VIU of CGU are clear.
In EFRAG’s view, it is inappropriate for the Interpretations Committee to create what appears to be a rebuttable presumption in the wording for rejection by stating that ‘using DDMs would rarely be appropriate’. In its view, the wording for rejection risks prohibiting in practice the use of a particular approach in IAS 36, even in those cases when the approach could be applied in a manner that is consistent with the principles in paragraphs 30 to 57 of IAS 36 for the calculation of VIU.
EFRAG invites comments by 27 October 2010.
 


© EFRAG - European Financial Reporting Advisory Group

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