Recoverable amount is 1. the asset can bring the present value of future cash flows 2. the fair value of the asset minus the net amount of disposal costs, 3. zero Whoever is higher of these three is who.
Fixed Asset Impairment Fixed assets are damaged, technologically obsolete, or for other economic reasons, resulting in their recoverable amount is less than their carrying value, this situation is called fixed asset impairment. If the recoverable amount of a fixed asset is less than its carrying value, a provision for impairment should be made for the difference between the recoverable amount and the carrying value, and recognized in profit or loss for the current period.
In layman's terms, it is worthless, for example, because of the emergence of new technologies, new equipment, resulting in the old equipment is worthless, or because of the output of this asset poor sales of products leading to a reduction in the present value of future cash flows, etc. Accounting will be considered fixed assets are impaired
What is the full amount of the provision for impairment when one of the following circumstances, the fixed asset should be in accordance with the full amount of the carrying value of the asset Provision for impairment, full provision for impairment of fixed assets no longer depreciated
1, long-term idle, will not be used in the foreseeable future, and there is no transfer value of fixed assets;
2, due to technological advances and other reasons, has been unusable fixed assets;
3, although the fixed assets can still be used, but the use of fixed assets produced a large number of substandard products;
3, although the fixed assets can still be used, but the use of a large number of substandard products;
3, the use of fixed assets is still available to the public.
4, has been destroyed, so that no longer has the value of use and transfer value of fixed assets;
5, other substantive fixed assets have been unable to bring economic benefits.
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