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STEPS
WORK TO BE PERFORMED
AXP TS:
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impairment testing
3.1
3.2
- Value in use
You are advised not to rely solely on this template to test the impairment losses.
o start the
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t losses.
Has the asset's market value declined significantly more than expected as a result of passage of time or normal use?
Are there any significant changes that have taken place or will take place that will adversely affect the Company's assets?
- Technological changes
- Market changes
- Economic changes
- Legal changes
Is there any increase in market interest rates or other market rates of return on investments?
Is the carrying amount of the net assets of the Company exceeding its market capitalisation?
Is there any evidence of obsolescence or physical damange of the assets of the Company?
Are there any significant changes that have taken place or will take place that will adversely affect the Company's assets?
- Do you want to review the list for consideration?
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Is there any evidence from internal reporting that indicates that the economic performance of an asset is, or will be, worse than expected?
- Do you want to review the list for consideration?
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the asset's market value declined significantly more than expected as a result of passage of time or normal use?
there any significant changes that have taken place or will take place that will adversely affect the Company's assets?
Technological changes
Market changes
Economic changes
Legal changes
ere any increase in market interest rates or other market rates of return on investments?
e carrying amount of the net assets of the Company exceeding its market capitalisation?
ere any evidence of obsolescence or physical damange of the assets of the Company?
there any significant changes that have taken place or will take place that will adversely affect the Company's assets?
Do you want to review the list for consideration?
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ere any evidence from internal reporting that indicates that the economic performance of an asset is, or will be, worse than expected?
Do you want to review the list for consideration?
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AXP TS:
Please answer all the
following questions.
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Goodwill
Corporate assets
TOTAL
TOTAL
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Errors in allocation of individual assets (if any):> 1 item is allocated, or no input in line 7
Goodwill and/or corporate assets are allocated
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Total
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Input:
First projection year
2006
Projected cash inflows
Projected cash outflows - Direct costs
Projected cash outflows - Other costs
Projected net cash flows at end of useful life:2006
2007
2008
2009
2010
Projected growth rate for:
Cash inflows:2007
2008
2009
2010
Cash outflows - Direct costs:2007
2008
2009
2010
Cash outflows - Other costs:2007
2008
Copyright 2006 AXP Solutions Sdn. Bhd.
Discount rate:2006
2007
2008
2009
2010
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TOTAL
2006
Projected cash inflows
Projected cash outflows - Direct costs
Projected cash outflows - Other costs
Projected net cash flows at end of useful life
Net Cash Flows
Net Present Value
2007
Projected cash inflows
Projected cash outflows - Direct costs
Projected cash outflows - Other costs
Projected net cash flows at end of useful life
Net Cash Flows
Net Present Value
2008
Projected cash inflows
Projected cash outflows - Direct costs
Projected cash outflows - Other costs
Projected net cash flows at end of useful life
Net Cash Flows
Net Present Value
2009
Projected
Projected
Projected
Projected
cash inflows
cash outflows - Direct costs
cash outflows - Other costs
net cash flows at end of useful life
2010
Projected cash inflows
Projected cash outflows - Direct costs
Projected cash outflows - Other costs
Projected net cash flows at end of useful life
Net Cash Flows
Net Present Value
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Name of Individual Assets / CGU
GRAND TOTAL
CARRYING AMOUNT
RECOVERABLE AMOUNT
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Name of Individual Assets / CGU
GRAND TOTAL
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Land
Buldings
Plant and machinery
Equipment and furniture
Motor vehicles
Other PPE (1)
Other PPE (2)
Other PPE (3)
Investment property - at cost
Deferred expenditure
Subsidiaries
Associates
Joint venture
Other investment (1)
Other investment (2)
Intangible assets
Goodwill
Corporate assets
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ash-generating Units
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Can the asset generate cash inflows that are largely INDEPENDENT from other assets?
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Result:
3
Assets not subject to impairment test under FRS 136 (but dealt with in other FRS)
Inventories
2
3
4
5
6
7
8
9
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After determining the sources for fair value, select the sources from drop-down list
Input the "fair value" determined using the sources indicated in step 1
Input the "costs to sell", other than those that have been recognised as liabilities
Reminder: Termination benefits and costs associated with reducing or reorganising a business following the disposal are excluded.
Example:
Key in the forecasted cash inflows & cash outflows for direct and other costs for the first forecast year/period
Key in the projected net cash flows of the assets at the end of the useful life
Key in the projected growth rate for the cash inflows & cash outflows for direct and other costs:Cash inflows
Cash outflows - Direct costs
Cash outflows - Other costs
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Net present value for the value in use will be generated automatically
Example:
Determining Goodwill
- And that the next financial year will begin on 1.1.2006 and end on 31.12.2006, Holding shall complete the allocation of goodwill latest by 31.12.2
- And that Holding changes its financial year end to 30.06.2006, Holding shall complete the allocation of goodwill latest by 30.06.2006.
Treatment of goodwill associated with the operation disposed of
4
The goodwill associated with the operation disposed of shall be:
included in the carrying amount of the operation when determining the gain or loss on disposal; and
measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained UNLESS the entity can demonst
better reflects the goodwill associated with the operation disposed of.
Treatment of goodwill associated with the reorganising of reporting structure
5
The goodwill associated with the operation disposed of shall be:
reallocated to the units affected; and
performed using a relative value approach UNLESS the entity can demonstrate that some other method better reflects the goodwill associated with the reorga
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Compare the carrying amount of the unit (including the carrying amount of corporate assets) with recoverable amount.
If a portion of the carrying amount of a corporate asset CANNOT be allocated on a reasonable and consistent basis
1
Compare the carrying amount of the unit (excluding the corporate asset), with its recoverable amount.
2
Identify the smallest group of cash-generating units that includes cash-generating unit under review and to which a portion of the carrying amount of the corpora
reasonable and consistent basis.
Compare the carrying amount of the group of units (including the corporate asset allocated to that group of units), with its recoverable amount.
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Line 6
Line 7
Line 9 ~ 26
ale costs
ce contracts
Line 7
Line 9
Line 12 ~ 19
al are excluded.
Cell B10
Line 11 ~ 13
Line 16 ~ 20
Line 24 ~ 27
Line 30 ~ 33
Line 36 ~ 39
Line 42 ~ 46
ting units that are expected to benefit from the synergies, irrespective of
nit retained UNLESS the entity can demonstrate that some other method
s to that unit
Line 26
basis