1. What does 'Impairment' mean ? A.An asset is impaired when its carrying amount exceeds its recoverable amount. 2. What is a 'Carrying amount' ? A.The carrying amount represents the amount at which an asset is recognized in the balance sheet after deducting accumulated depreciation and accumulated impairment losses. 3. What does the 'Recoverable amount' represent ? A.The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use. 4. What is the 'Fair Value' of an asset ? A.Fair Value represents the amount obtainable from the sale of an asset in a bargained transaction between knowledgeable, willing parties. What is the 'Value in Use' of an asset ? A.Value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit. What does a Cash-Generating Unit represent ? A.A cash-generating unit is the smallest identifiable group
These are some notes from my learnings in EBS for past 13 years.