Tests for reduction to the recoverable value of assets CPC 01 IAS 36

Companies are obliged to adjust the value of their assets to their respective recoverable value if it is lower than their accounting value.

Therefore, companies need to test this value (Impairment test) whenever it is suspected to be lower than the accounting value, or at least once a year.

The norm that regulates this test is CPC 01.

In accordance with this norm, there are two ways to evaluate the recoverable value:

  • In accordance with the sale net value, which is the evaluated value of the asset minus the sales and decommissioning cost;
  • In accordance with the value in use, which measures the present value of the future results generated by the asset.

The norm has specific – often complex – terms for calculation of the recoverable value of intangible assets and goodwill.

At SETAPE, we are trained and have significant experience in Impairment test projects for our clients.