Fixed asset impairments – IAS 36

Requirement

Where the current market value of a fixed asset is lower than its net book value, the company must adjust the carrying value of the asset to reflect the lower market value. To identify the possibility of such book adjustments, the company must create an impairment test for all relevant assets.

M3 solution

In M3, generic functionality is used to calculate a re-acquisition value using price index tables. This indexed value is then compared against the current net book value and if the re-acquisition value is lower an additional depreciation adjustment must be booked to reflect the impairment write-down.

Configuration guidelines

Program ID	Program name	Description or comment
FAS060	Fixed Asset Value Type. Open	To store the impairment adjustment
FAS140	Fixed Asset - Extraordinary Depreciation	To book the accounting adjustment
FAS200	Fixed Asset. Display	To display the impairment value
FAS510	Fixed Asset. Print Value	To print asset and impairment values