IRFS Presentation

8/18/2019 IRFS Presentation

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Impairment of

Assets (IND AS 36SAMMARTH TULI - 1325RA!AAN "AITL! - 13235DHRU# S$NI- 13%2


2/20

$&'etie

T*e o&'etie of IND AS 36 is to presri&e t*e proe+,res t*at an eapp.ies to ens,re t*at its assets are arrie+ at no more t*an t*eir reamo,nt/ An asset is arrie+ at more t*an its reoera&.e amo,nt if arrin0 amo,nt eee+s t*e amo,nt to &e reoere+ t*ro,0* ,se t*e asset/ If t*is is t*e ase t*e asset is +esri&e+ as impaire+ an+re,ires t*e entit to reo0ni4e an impairment .oss/

It a.so speies *en an entit s*o,.+ reerse an impairment .oss apresri&es +is.os,res/


3/20

7osts of +isposa. are inrementa. osts +iret. attri&,ta&.eto t*e +isposa. of an asset or as*-0eneratin0 ,nite.,+in0 nane osts an+ inome ta epense/

Depreiation (Amortisation) is t*e sstemati a..oation oft*e +epreia&.e amo,nt of an asset oer its ,sef,. .ife/

80- s,ppose A97 .t+/ Spent :3% mi..ion +o..ars on a patentit* a ,sef,. .ife of 15 ears/ A97 .t+ o,.+ reor+ :2mi..ion ea* ear as an amortisation epense/


4/20

Sope Assets an+ as* 0eneratin0 ,nits (7;Us’)

in.,+e+ it*in t*e sope of IAS 36 are< = >ropert >.ant an+ 8,ipment an+ Intan0i&.eassets

= 7as* 0eneratin0 ,nits (7;Us) in.,+in0 t*oseto *i* 0oo+i.. arisin0 from a &,sinessom&ination *as &een a..oate+

= Inestment propert meas,re+ at ost

An inestor’s interest in t*e fo..oin0 entities for*i* t*e entit ao,nts for its interest inaor+ane it* t*e e,it met*o+ ,n+er IAS 2?

(2%11)< = Assoiates an+ "oint ent,res

An inestor’s interest in t*e fo..oin0 entities inits separate nania. statements (,n.ess t*eentit *as opte+ to meas,re t*ese in aor+aneit* I@RS or IAS 3 if I@RS *as not &eena+opte+ ear.)<

= S,&si+iaries Assoiates an+ "oint ent,res

Assets t*at are e.,+e+ from t*e sope of

36 Impairment of Assets are (IAS 36/2)< = Inentories (IAS 2)

= Assets arisin0 from onstr,tion ontrat11)

= Deferre+ ta assets (IAS 12)

= Assets arisin0 from emp.oee &enets (IA

@inania. assets (it*in t*e sope of I@RS IAS 3 if I@RS *as not &een a+opte+ ear.

= Inestment propert meas,re+ at fair a(IAS %)

= 9io.o0ia. assets at fair a.,e .ess osts t(IAS 1)

= Ins,rane ontrats (I@RS )

= Non-,rrent assets or +isposa. 0ro,ps.assie+ as *e.+ for sa.e (I@RS 5)/


5/20

Impairment I+entifin0 *et*er a rea.,e+ asset ma &e impaire+ +epen+s on t*e &asis ,se+ to

fair a.,e<

(a) if t*e asset’s fair a.,e is its marBet a.,e t*e on. +iCerene &eteen t*e assetan+ its fair a.,e .ess osts to se.. is t*e +isposa. ost/

(i) if t*e +isposa. osts are ne0.i0i&.e t*e reoera&.e amo,nt of t*e rea.,e+ asset .ose to or 0reater t*an its rea.,e+ amo,nt (ie fair a.,e)/ In t*is ase after t*e rere,irements *ae &een app.ie+ it is ,n.iBe. t*at t*e rea.,e+ asset is impaire+ anamo,nt nee+ not &e estimate+/

(ii) if t*e +isposa. osts are not ne0.i0i&.e t*e fair a.,e .ess osts to se.. of t*e reaneessari. .ess t*an its fair a.,e/ T*erefore t*e rea.,e+ asset i.. &e impaire+ if i,se is .ess t*an its rea.,e+ amo,nt (ie fair a.,e)/ In t*is ase after t*e rea.,ationre,irements *ae &een app.ie+ an entit app.ies t*is Stan+ar+ to +etermine *et*ma &e impaire+/

(&) if t*e asset’s fair a.,e is +etermine+ on a &asis ot*er t*an its marBet a.,e its ramo,nt (ie fair a.,e) ma &e 0reater or .oer t*an its reoera&.e amo,nt/ Hene rea.,ation re,irements *ae &een app.ie+ an entit app.ies In+ AS 36 to +etermint*e asset ma &e impaire+/


6/20

I+entifin0 an asset t*at maimpaire+At t*e en+ of ea* reportin0 perio+ an entit is re,ire+ to assess t*ere is an in+iation t*at an asset ma &e impaire+ (i/e/ its arrima &e *i0*er t*an its reoera&.e amo,nt)/ IAS 36 *as a .ist of einterna. in+iators of impairment/ If t*ere is an in+iation t*at an as&e impaire+ t*en t*e assets reoera&.e amo,nt m,st &e a.,.at

T*e reoera&.e amo,nts of t*e fo..oin0 tpes of intan0i&.e assetmeas,re+ ann,a.. *et*er or not t*ere is an in+iation t*at it maimpaire+/ In some ases t*e most reent +etai.e+ a.,.ation of reamo,nt ma+e in a pree+in0 perio+ ma &e ,se+ in t*e impairment*at asset in t*e ,rrent perio+<

- an intan0i&.e asset it* an in+enite ,sef,. .ife

- an intan0i&.e asset not et aai.a&.e for ,se

- 0oo+i.. a,ire+ in a &,siness om&ination


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ASS8SSIN; IM>AIRM8NT

8terna. so,res of information

(a) +,rin0 t*e perio+ an asset’s marBet a.,e *as +e.ine+ si0niant. more t&e epete+ as a res,.t of t*e passa0e of time or norma. ,se/

(&) si0niant *an0es ( eonom marBet et/)

() marBet interest rates or ot*er marBet rates of ret,rn on inestments *ae in+,rin0 t*e perio+ an+ t*ose inreases are .iBe. to aCet t*e +iso,nt rate ,sea.,.atin0 an asset’s a.,e in ,se an+ +erease t*e asset’s reoera&.e amo,n

Interna. so,res of information

(e) ei+ene is aai.a&.e of o&so.esene or p*sia. +ama0e of an asset/

(f) si0niant *an0es in ,sa0e ( +isontin,ation of asset ear. +isposa. reasa.ife of an asset)

(0) in+iation of +e.ine in t*e performane of assets

(*) orse as* Fos t*an &,+0ete+


8/20

Meas,rin0 reoera&.e amo,

IAS 36/6 +enes an asset’s or 7;U’s reoera&.e amo,nt as< ‘ t*e its fair a.,e .ess osts of +isposa. an+ its a.,e in ,se/ ’

IAS 36 +oes not re,ire &ot* fair a.,e .ess osts of +isposa. an+ a.to &e a.,.ate+/ It is s,ient to a.,.ate on. one of t*e a&oe ameit*er fair a.,e .ess osts of +isposa. or a.,e in ,se) so .on0 as t*eee+s t*e arrin0 amo,nt/


9/20

Discount rate

In meas,rin0 a.,e in ,se t*e +iso,nt rate ,se+ s*o,.+ &erate t*at reFets ,rrent marBet assessments of t*e time amone an+ t*e risBs spei to t*e asset/


10/20

#a.,e in ,se

T*e fo..oin0 e.ements s*a.. &e reFete+ in t*e a.,.ation of an asset’s a.,e in ,se<

(a) an estimate of t*e f,t,re as* Fos t*e entit epets to +erie from t*e assetJ

(&) epetations a&o,t possi&.e ariations in t*e amo,nt or timin0 of t*ose f,t,re as* FosJ

() risB-free rate of interestJ

(+) risB premi,m


11/20

@air #a.,e .ess 7osts of Dispo >reio,s. t*is meas,re as terme+ ‘fair a.,e .ess osts to se..’/

T*e *an0e in termino.o0 as intro+,e+ at t*e same time as t*e intro+,tion of I@RS 13 @aMeas,rement

>rior to t*e eCetie +ate of I@RS 13 IAS 36 proi+e+ a *ierar* ,pon *i* fair a.,e .ess oas +etermine+/ In +esen+in0 or+er t*is omprise+<

= A &in+in0 sa.es a0reement (in an arms-.en0t* transation = i/e/ not +istresse+ sa.es or ‘re’ s

= An atie marBet in *i* t*e asset is tra+e+ (in.,+in0 reent transations for simi.ar asset

= T*e &est information aai.a&.e to reFet t*e amo,nt t*at t*e entit o,.+ o&tain from t*e sa(i/e/ t*is o,.+ re,ire t*e ,se of +iso,nte+ as* Fo (D7@) omp,tations &ase+ on marBet a


12/20

7as* 0eneratin0 ,nits an+ 0oo+i..

if it is not possi&.e to estimate t*e

reoera&.e amo,nt of t*ein+ii+,a. asset an entit s*a..+etermine t*e reoera&.eamo,nt of t*e as*-0eneratin0,nit to *i* t*e asset &e.on0s/

T*e reoera&.e amo,nt of anin+ii+,a. asset annot &e+etermine+ if<

(a) t*e asset’s a.,e in ,se

annot &e estimate+ to &e .oseto its fair a.,e .ess osts to se..

(&) t*e asset +oes not 0enerateas* inFos t*at are .ar0e.in+epen+ent of t*ose from ot*erassets/

8amp.e< A minin0 entit ons a

priate rai.a to s,pport its minin0atiities/ T*e priate rai.a o,.+&e so.+ on. for srap a.,e an+ it+oes not 0enerate as* inFos t*atare .ar0e. in+epen+ent of t*e as*inFos from t*e ot*er assets of t*emine/

It is not possi&.e to estimate t*ereoera&.e amo,nt of t*e priate

rai.a &ea,se its a.,e in ,seannot &e +etermine+ an+ ispro&a&. +iCerent from srap a.,e/

T*erefore t*e entit estimates t*ereoera&.e amo,nt of t*e as*-0eneratin0 ,nit to *i* t*e priaterai.a &e.on0s ie t*e mine as a*o.e/


13/20

an asset’s as*-0eneratin0

,nit is t*e sma..est 0ro,p ofassets t*at in.,+es t*e

asset an+ 0enerates as*inFos t*at are .ar0e.in+epen+ent of t*e as*inFos from ot*er assets or0ro,ps

of assets/ I+entiation ofan asset’s as*-0eneratin0

,nit ino.es ',+0ement/ Ifreoera&.e amo,nt annot&e +etermine+ for anin+ii+,a. asset an entiti+enties t*e .oesta00re0ation of assets t*at0enerate .ar0e.in+epen+ent as* Fos/

8amp.e< A &,s ompan proi+es series ,

ontrat it* a m,niipa.it t*at re,ires minserie on ea* of

e separate ro,tes/ Assets +eote+ to ea* an+ t*e as* Fos from ea* ro,te an &ei+entie+

separate./ $ne of t*e ro,tes operates at asi0niant .oss/

9ea,se t*e entit +oes not *ae t*e option ,rtai. an one &,s ro,te t*e .oest .ee. ofi+entia&.e as*

inFos t*at are .ar0e. in+epen+ent of t*e ainFos from ot*er assets or 0ro,ps of assets as* inFos

0enerate+ & t*e e ro,tes to0et*er/ T*e a0eneratin0 ,nit for ea* ro,te is t*e &,s omas a *o.e/


14/20

Reoera&.e amo,nt an+ arriamo,nt of a as*-0eneratin0 ,n

an+ 0oo+i..

T*e reoera&.e amo,nt of a as*-0eneratin0 ,nit is t*e *i0*er of t*e as*-0eneratin0 ,nit’s fair a.,e .ess osts tose.. an+ its a.,e in ,se/

T*e arrin0 amo,nt of a as*-0eneratin0 ,nit s*a.. &e +etermine+ on a&asis onsistent it* t*e a t*e

reoera&.e amo,nt of t*e as*-0eneratin0 ,nit is +etermine+/

T*e arrin0 amo,nt of a as*-0eneratin0,nit in.,+es t*e arrin0 amo,nt of on.t*ose assets t*at i.. 0enerate t*e f,t,reas* inFos ,se+ in +eterminin0 t*eas*-0eneratin0 ,nit’s a.,e in ,se/

;oo+i..<

@or t*e p,rpose of impairment testina,ire+ in a &,siness om&ination sa,isition +ate &e a..oate+ to ea*as*-0eneratin0 ,nits or 0ro,ps of ,nits t*at is epete+ to &enet fromt*e om&ination irrespetie of *et.ia&i.ities of t*e a,ire are assi0ne+ 0ro,ps of ,nits/ If 0oo+i.. *as &een a0eneratin0 ,nit an+ t*e entit +isposit*in t*at ,nit t*e 0oo+i.. assoiatoperation +ispose+ of s*a.. &e<

(a) in.,+e+ in t*e arrin0 amo,nt o*en +eterminin0 t*e 0ain or .oss on

(&) meas,re+ on t*e &asis of t*e re.aoperation +ispose+ of an+ t*e portion0eneratin0 ,nit retaine+ ,n.ess t*e e+emonstrate t*at some ot*er met*o+0oo+i.. assoiate+ it* t*e operatio


15/20

Recognition of an impairment loss

1/ An impairment .oss is reo0nise+ *eneer reoera&amo,nt is &e.o arrin0 amo,nt/

2/ T*e impairment .oss is reo0nise+ as an epense3/ A+',st +epreiation for f,t,re perio+s


16/20

TIMIN; $@ IM>AIRM8NT ASS

T*e ann,a. impairment test for a as*-0eneratin0 ,nit to *i* 0oo

&een a..oate+ ma &e performe+ at an time +,rin0 an ann,a. perproi+e+ t*e test is performe+ at t*e same time eer ear/

If t*e assets onstit,tin0 t*e as*-0eneratin0 ,nit to *i* 0oo+i..a..oate+ are teste+ for impairment at t*e same time as t*e ,nit ot*e 0oo+i.. t*e s*a.. &e teste+ for impairment &efore t*e ,nit ot*e 0oo+i../ Simi.ar. if t*e as*-0eneratin0 ,nits onstit,tin0 a 0ras*-0eneratin0 ,nits to *i* 0oo+i.. *as &een a..oate+ are test

impairment at t*e same time as t*e 0ro,p of ,nits ontainin0 t*e 0t*e in+ii+,a. ,nits s*a.. &e teste+ for impairment &efore t*e 0ro,pontainin0 t*e 0oo+i../


17/20

Impairment .oss for a as*-0eneratin0 ,nit

An impairment .oss s*a.. &e reo0nise+ for a as*-0eneratin0 ,nit (t*e sma..est

0eneratin0 ,nits to *i* 0oo+i.. or a orporate asset *as &een a..oate+) if reoera&.e amo,nt of t*e ,nit (0ro,p of ,nits) is .ess t*an t*e arrin0 amo,n(0ro,p of ,nits)/ T*e impairment .oss s*a.. &e a..oate+ to re+,e t*e arrin0 assets of t*e ,nit (0ro,p of ,nits) in t*e fo..oin0 or+er<

(a) rst to re+,e t*e arrin0 amo,nt of an 0oo+i.. a..oate+ to t*e as*-0e

(&) t*en to t*e ot*er assets of t*e ,nit pro rata on t*e &asis of t*e arrin0 amasset in t*e ,nit

These reductions in carrying amounts shall be treated as impairment

individual assets. an entit s*a.. not re+,e t*e arrin0 amo,nt of an asset &e.o t*e *i0*est of

(a) its fair a.,e .ess osts to se.. (if +etermina&.e)J

(&) its a.,e in ,se (if +etermina&.e)J an+

() 4ero/


18/20

Reersin0 an impairment .oss for a as*-0eneratin0 ,nitK*en o, reerse an impairment .oss for a as*-0eneratin

o, nee+ to a..oate reersa. to t*e assets of t*e ,nit (e

0oo+i..) pro rata it* t*e arrin0 amo,nts of t*ese as T*e arrin0 amo,nt of an assets s*a.. not &e inrease+ a&

.oer of< Its reoera&.e amo,nt an+ T*e arrin0 amo,nt t*at o,.+ *ae &een +etermine+amorti4ation or +epreiation) it*o,t an prior impairme


19/20

Dis.os,res IAS 36 re,ires etensie +is.os,res in respet of t*e impairment

performe+ an+ impairments reo0nise+/ T*e +is.os,res are een metensie for 0oo+i.. t*an for t*e impairment of ot*er assets/ T*e+is.os,re re,irements are t*e fo..oin0<

T*e amo,nts of impairments reo0nise+ an+ reerse+

T*e amo,nt of 0oo+i.. per 7;U or 0ro,p of 7;Us

T*e a.,ation met*o+ app.ie+

+eterminin0 t*e appropriate ass,mptions

T*e Be ass,mptions app.ie+ in t*e a.,ation in.,+in0 t*e 0ro+iso,nt rate ,se+


20/20

Impairments an+ eCets on nania. statements/

Inome of preio,s ears i.. not &e a+',ste+

7,rrent ears inome statement i.. in.,+e a .oss0ain +,e to imprea.,ations

In ase impairment .oss or 0ain is reo0nise+ on assets &ein0 arrirea.,e+ assets t*e a+',stments i.. aCet rea.,ation resere/

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