On 29 May 2013, the International Accounting Standards Board issued Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36). The amendments have an effective date of 1 January 2014, but earlier adoption is permitted for periods when the entity has already applied IFRS 13.
The objective of the project is to amend the disclosure requirements in IAS 36 Impairment of Assets with regard to the measurement of the recoverable amount of impaired assets that were made as a consequence of issuing IFRS 13 Fair Value Measurement in May 2011.
In 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 resulted in the requirement being more broadly applied than the IASB had intended. In particular, instead of requiring an entity to disclose the recoverable amount of an asset (including goodwill) or a cash-generating unit for which a material impairment loss was recognised or reversed during the reporting period, the amendment made to IAS 36 required an entity 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 in comparison with the entity’s total carrying amount of goodwill or of intangible assets with indefinite useful lives. This project aims to amend IAS 36 so that those disclosure requirements better represent the IASB’s intention.
In addition, this project also aims to incorporate an amendment to IAS 36 that had been proposed by the Exposure Draft Annual Improvements to IFRSs 2010–2012 Cycle published in the May 2012, called Harmonisation of disclosures for value in use and fair value less cost of disposal. That Exposure Draft proposed an amendment that would require an entity to disclose the discount rate used in a present value technique that had been used in determining the recoverable amount of an impaired asset on the basis on fair value less costs of disposal. That amendment aimed to harmonise the disclosure requirements for fair value less costs of disposal and value in use when present value techniques are used to determine the recoverable amount.