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Prepared by: _______________ Date: _______________

Reviewed by: _______________ Date: _______________


Client's Name:
Sample Sdn. Bhd.
Year / Period Ended:31 December 2005
Subject:
Summary of impairment testing

STEPS

WORK TO BE PERFORMED

Indication of impairment losses

Identify assets for impairment tests

AXP TS:
Please click me to start the
impairment testing

Measuring recoverable amount

3.1

- Fair value less costs to sell

3.2

- Value in use

Recognising and measuring impairment losses

Allocating impairment losses

IMPORTANT NOTES TO THE USERS OF THIS IMPAIRMENT TESTING TEMPLATE:


1
Users should read and understand FRS 136 Impairment of Assets before using this template.
2

Throughout this template, please take note of the following:


represents editable areas by the users
Words

represents results derived from your inputs.


represents hyperlink to other parts of this documents

You are advised not to rely solely on this template to test the impairment losses.

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

CONCLUSION OF THE INDIVIDUAL STEPS


-

o start the
ng

0
0
0
0

ore using this template.

t losses.

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________
Client's Name:
Year / Period Ended:
Subject:
EXTERNAL SOURCES OF INFORMATION
1

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?

INTERNAL SOURCES OF INFORMATION


5

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?
-

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?
-

REVIEW FOR IMPAIRMENT LOSS FOR INTANGIBLE ASSETS

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________
8
9
10

Is there any intangible asset with an indefinite useful life?


is there any intangible asset not yet available for use?
Is there any goodwill acquired in a business combination?

CONCLUSION ON ASSESSMENT OF THE INDICATION OF IMPAIRMENT OF ASSETS:-

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________
Sample Sdn. Bhd.
31 December 2005
Indication of Impairment Assets

Back to summary

ERNAL SOURCES OF INFORMATION

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?

ERNAL SOURCES OF INFORMATION

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?

Pls select

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?

Pls select

IEW FOR IMPAIRMENT LOSS FOR INTANGIBLE ASSETS

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

ere any intangible asset with an indefinite useful life?


ere any intangible asset not yet available for use?
ere any goodwill acquired in a business combination?

NCLUSION ON ASSESSMENT OF THE INDICATION OF IMPAIRMENT OF ASSETS:-

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Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

Back to summary

AXP TS:
Please answer all the
following questions.

Pls select
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Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________
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Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________
Client's Name:
Year / Period Ended:
Subject:

Sample Sdn. Bhd.


31 December 2005
Identify Assets for Impairment Tests and Determine their Carrying Amounts

Help

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Name of Individual Assets / CGU


Individual Assets / CGU
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
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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Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

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Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________
Client's Name:
Year / Period Ended:
Subject:

Sample Sdn. Bhd.


31 December 2005
Determininng Fair Value Less Costs to Sell

Help

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Name of Individual Assets /


CGU
Sources of Fair value
FAIR VALUE
LESS: COSTS TO SELL
- Legal costs
- Stamp duty
- Other transaction taxes
- Costs of removing the asset
- Direct incremental costs
- Other (1)
- Other (2)
- Other (3)

Fair Value Less Costs to Sell

Total

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Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

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Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________
Client's Name:
Year / Period Ended:
Subject:

Sample Sdn. Bhd.


31 December 2005
Determining Value in Use

Help

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Name of Individual Assets /


CGU
To Assess VIU?

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.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________
2009
2010

Discount rate:2006
2007
2008
2009
2010

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Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________
Client's Name:
Year / Period Ended:
Subject:

Sample Sdn. Bhd.


31 December 2005
Determining Value in Use

Help

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Name of Individual Assets / CGU

TOTAL

NET PRESENT VALUE

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

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________
Net Cash Flows
Net Present Value

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

Back to summary
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Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________
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Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________
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Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________
Client's Name:
Year / Period Ended:
Subject:

Sample Sdn. Bhd.


31 December 2005
Summary of Proposed Impairment Losses

Back to summary
Name of Individual Assets / CGU

GRAND TOTAL

CARRYING AMOUNT

Fair value less costs to sell


Value in use

RECOVERABLE AMOUNT

Impairment Losses To Be Recognised


- Goodwill
- Assets other than goodwill

Add: Impairment losses recogised previously on:- Goodwill


- Assets other than goodwill

Less: Impairment losses reversed

Accumulated impairment losses recognised

Accumulated impairment losses carried forward:- Goodwill


- Assets other than goodwill

Back to summary
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Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________
Client's Name:
Year / Period Ended:
Subject:

Sample Sdn. Bhd.


31 December 2005
Summary of Allocation of Impairment Losses to Individual Assets / Cash-generating Units

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Name of Individual Assets / CGU

GRAND TOTAL

Individual Assets / CGU

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IMPAIRMENT LOSSES TO BE RECOGNISED

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

Back to summary

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

ash-generating Units

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Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

Pls select

Pls select

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________
Client's Name:
Year / Period Ended:
Subject:

Sample Sdn. Bhd.


31 December 2005
Help on Using Impairment Testing Template

Guidelines to complete CA ("Carrying Amount") Sheet


1

Identify individual assets and/or cash-generating units subject to impairment test.


Question:

Select whether the asset(s) is an individual asset or cash-generating unit


Guidance:
Can the asset's value in use be estimated to be close to its fair value less costs to sell?

Pls select

Can the asset generate cash inflows that are largely INDEPENDENT from other assets?

Pls select

Result:
3

What assets are excluded from the scope of FRS 136Click me

Fill in the CARRYING AMOUNT of the individual asset(s) or cash-generating unit(s)


Reminder: For individual assets Please ensure that ONLY one amount is allocated to individual asset(s).
Example:

Assets not subject to impairment test under FRS 136 (but dealt with in other FRS)

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________
1

Inventories

2
3
4
5
6
7
8
9

Assets arising from construction contracts


Deferred tax assets
Assets arising from employee benefits
Financial assets that are within the scope of FRS 139
Investment property that is measured at fair value
Biological assets related to agricultural activity that are measured at fair value less estimated point-of-sale costs
Deferred acquisition costs, and intangible assets, arising from insurer's contractual rights under insurance contracts
Non-current assets (or disposal groups) classfied as held for sale

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Guidelines to determine Recoverable Amount - Fair value less costs to sell


1

Is there any binding sale agreement in an arm's length transaction?

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Guidelines to complete FV ("Fair value less costs to sell") Sheet


1

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:

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

Guidelines to complete VIU-Input ("Value in use") Sheet


1

Key in the first forecast year/period in cell B10

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

Key in the discount rate for discounting future cash flows


Question:

How to determine discount rate?

Click me

Net present value for the value in use will be generated automatically
Example:

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

Determining Goodwill

Allocation of goodwill on acquisition


1
From the acquisition date, goodwill acquired in a business combination shall be allocated to the acquirer's cash-generating units that are expected to benefit from
whether other assets or liabilities of the acquiree are assigned to those units.
Example:
Holding acquired Subsidiary on 1.9.2005, during the financial year from 1.1.2005 ~ 31.12.2005. Holding shall allocate goodwill acquired on 1.9.20
2

Each unit to which goodwill is so allocated shall:


represent the lowest level within the entity at which the goodwill is monitored for internal management purposes; and
not be larger than a primary or secondary segments as determined by FRS 114 (2004).

Initial allocation that cannot be completed during the annual period


3
If the initial allocation of goodwill acquired in a business combination cannot be completed before the end of the annual period in which the business combination
that intial allocation shall be completed before the end of the first annual period beginning after the acquisition date.
Example:

If Holding cannot complete the allocation of goodwill by 31.12.2005:-

- 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

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

Back to CA

Determining Corporate Assets


In testing a cash-generating unit for impairment, an entity shall identify all the corporate assets that relate to the cash-generating unit under review.
If a portion of the carrying amount of a corporate asset CAN be allocated on a reasonable and consistent basis to that unit
1

Fill in the carrying amount of corporate assets of a cash-generating unit.

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

Recognise any impairment loss.

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.

Recognise any impairment loss.

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Determining Discount Rate


1 Is the asset-specific rate directly available from the market?
-

Pls select

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

Line 6

Line 7
Line 9 ~ 26

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

ale costs
ce contracts

Line 7
Line 9
Line 12 ~ 19

al are excluded.

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

Cell B10
Line 11 ~ 13
Line 16 ~ 20

Line 24 ~ 27
Line 30 ~ 33
Line 36 ~ 39
Line 42 ~ 46

Net Present Value

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

ting units that are expected to benefit from the synergies, irrespective of

g shall allocate goodwill acquired on 1.9.2005.

al period in which the business combination is effected

e the allocation of goodwill latest by 31.12.2006.


of goodwill latest by 30.06.2006.

nit retained UNLESS the entity can demonstrate that some other method

ects the goodwill associated with the reorganised units.

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

rating unit under review.

s to that unit

Line 26

basis

rtion of the carrying amount of the corporate asset can be allocated on a

h its recoverable amount.

Copyright 2006 AXP Solutions Sdn. Bhd.

Prepared by: _______________ Date: _______________


Reviewed by: _______________ Date: _______________

Copyright 2006 AXP Solutions Sdn. Bhd.

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