they all have different rules and they are all different under GAAP and IFRS.
Inventory write down:
IFRS:
compare carrying value of inventory and NRV is FV-selling cost
if CV>NRV, write down the inv to NRV
GAAP:
compare carrying value of inventory and REPlacement cost, rep should be between the range of (NRV-normal profit) and NRV.
if CV> REP
write down inv to REP
Asset impairment:
IFRS:
compare CV to recoverable amount
recoverable amount = higher of (Value in use) or (FV-selling cost)
if CV>RA, impairment=CV-RV
GAAP:
test: compare CV and undiscounted future cashflow
if CV> UnDisFCF, then impariment exists.
then, CV-PV of future cash flow=impairment
goodwill impairment
IFRS:
compare CV and FV of reporting unit
if CV>FV, then goodwill is impaired and should be reduced by this amount.
GAAP:
compare CV and FV of sub
if CV> FV, goodwill is mpaired, then
FV of sub - FV of net identifiable asset=actual goodwill,
the original goodwill should be write down to this amount.
there is some details about "value in use" that i missed. I forgot where to put it...
Edited 1 time(s). Last edit at Friday, June 3, 2011 at 03:18PM by passme.作者: Otabek 时间: 2011-7-13 16:30
b/s will go down by the amount of impairment
I/S will go down by the amount of impairment
I think.....作者: flyinggirl 时间: 2011-7-13 16:30
yes, it's an income statement charge.作者: eoin 时间: 2011-7-13 16:30
impairment is an I/S charge
I still can't figure out the inventory impairment under GAAP
