Recognition and Measurement of an Impairment Loss

1. Paragraphs 60 to 65 set out the requirements for recognising and measuring impairment losses for an individual asset. Recognition and measurement of impairment losses for a cash-generating unit are dealt with in paragraphs 90 to 95.

2. If, and only if, the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset should be reduced to its recoverable amount. That reduction is an impairment loss.

3. An impairment loss should be recognised as an expense in the income statement immediately, unless the asset is carried at revalued amount under another Financial Reporting Standard. Any impairment loss of a revalued asset should be treated as a revaluation decrease under that other Financial Reporting Standard.

4. An impairment loss on an asset is recognised as an expense in the income statement. However, an impairment loss on a revalued asset is recognised directly against any revaluation surplus for the asset to the extent that the impairment loss does not exceed the amount held in the revaluation surplus for that same asset.

5. When the amount estimated for an impairment loss is greater than the carrying amount of the asset to which it relates, an enterprise should recognise a liability if, and only if, that is required by another Financial Reporting Standard.

6. After the recognition of an impairment loss, the depreciation (amortisation) charge for the asset should be adjusted in future periods to allocate the asset's revised carrying amount, less its residual value (if any), on a systematic basis over its remaining useful life.

7. If an impairment loss is recognised, any related deferred tax assets or liabilities are determined in accordance with FRS 112₂₀₀₄, Income Taxes.

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