Guide to International Financial Reporting Standards in Canada IAS 36 Impairment of Assets

Transcription

1 CANADIAN SERIES Guide to International Financial Reporting Standards in Canada IAS 36 Impairment of Assets Irene Wiecek, FCPA, FCA Martha Dunlop, FCPA, FCA Jane Bowen, FCPA, FCA primary editor: Alex Fisher, CPA, CA FINANCIAL REPORTING

2 CANADIAN SERIES Guide to International Financial Reporting Standards in Canada IAS 36 Impairment of Assets Irene Wiecek, FCPA, FCA Martha Dunlop, FCPA, FCA Jane Bowen, FCPA, FCA primary editor: Alex Fisher, CPA, CA

3 IAS 36 Impairment of Assets iii Table of Contents Preface 1 Introduction to IAS 36 5 Standards Update 5 Key Standards Referred to in This Publication 6 IAS 36 Definitions 7 Overview of Key Requirements 8 Analysis of Relevant Issues 10 Identifying an Asset That May Be Impaired 11 Indicators of Impairment 11 Measuring Recoverable Amount 13 Determining Recoverable Amount at the Level of the Individual Asset or CGU 15 Relief for Determination of Recoverable Amount Certain Intangible Assets and Goodwill 18 FVLCD 20 VIU 21 CGUs and Goodwill 28 Identifying an Asset s CGU 28 Carrying Amount 30 Goodwill 31 Corporate Assets 36 Impairment Loss for a CGU 37 Interim Financial Reporting 39 Reversing an Impairment Loss 39 Recognition, Measurement and Presentation of Impairment Loss Reversals 40 Disclosure 41 Using Present Value Techniques to Measure VIU 45

4 iv Guide to International Financial Reporting in Canada Impairment Testing CGUs with Goodwill and NCIs 46 NCIs Measured as Proportionate Interest 47 Accounting Policy Choices 48 Significant Judgments and Estimates 48 APPENDIX A Acronyms Used 50 List of Extracts Extract 1 Excerpt from Nexen Inc Financial Note 5B Indicators of Impairment 12 Extract 2 Excerpt from Suncor Energy Inc Financial Note 9 Indicators of Impairment 12 Extract 3 Excerpt from Royal Bank of Canada 2012 Financial Note 11 Calculation of Recoverable Amount 14 Extract 4 Excerpt from Pizza Pizza Royalty Corp Financial Note 4 Calculation of Recoverable Amount 14 Extract 5 Excerpt from Metro Inc Financial Note 16 Calculation of Recoverable Amount 18 Extract 6 Excerpt from Air Canada 2012 Notes to Financial Note 5 Relief from Calculating Recoverable Amount 20 Extract 7 Excerpt from Corby Distilleries Limited 2012 Notes to Financial Note 12 Inputs Used to Determine Discount Rates 25 Extract 8 Excerpt from Air Canada 2012 Financial Note 5 Calculating VIU 26 Extract 9 Excerpt from Astral Media Inc Financial Note 8 Calculating VIU 26 Extract 10 Excerpt from Suncor Energy Inc Financial Note 9 Calculating FVLCD 27 Extract 11 Excerpt from Rona Inc Financial Note 14 CGU Groupings 31

5 Table of Contents v Extract 12 Excerpt from Astral Media Inc Financial Note 8 CGU at Lower Level Than Operating Segment 33 Extract 13 Excerpt from Maple Leaf Foods Inc Financial Note 3 Corporate Assets 37 Extract 14 Excerpt from Astral Media Inc Financial Note 8 Reversal of Impairment Loss 41 Extract 15 Excerpt from Sherritt International Corporation 2012 Financial Note 2.13 Accounting Policy Note As It Relates to Impairments 43 Extract 16 Excerpt from Bombardier Inc Financial Note 4 Critical Accounting Estimates and Judgments As They Relate to Impairment Regarding Aerospace Program Tooling 44 Extract 17 Excerpt from Bombardier Inc Financial Note 4 Sensitivity Disclosures As They Relate to Aerospace Program Tooling 45 List of Illustrations Illustration 1 Some Indicators of Impairment As Noted in IAS Illustration 2 Decision Tree Recoverable Amount 13 Illustration 3 Level of Impairment Testing 17 Illustration 4 Relief Regarding Calculation of Recoverable Amount for Indefinite-Lived Intangibles and Goodwill 19 Illustration 5 The Difference between FVLCD and VIU 21 Illustration 6 Calculating VIU Cash Flows 22 Illustration 7 Recognition and Presentation of Impairment Losses 38 Illustration 8 Indicators of Impairment Reversal As Noted in IAS Illustration 9 Types of Disclosures Required by IAS Illustration 10 Two Approaches to Computing Present Value 45 Illustration 11 Some Significant Judgments and Sources of Estimation Uncertainty under IAS 36 48