From Impairment Signal to Recoverable Amount

Trigger moment The regional unit lost its largest customer and missed budget by 28%. Carrying amount is $9.6 million. A trigger without a recoverability test leaves users guessing whether assets are overstated. IAS 36 path Indicator -> test level -> recoverable amount -> conclusion IAS 36 starts with indicators, but it does not end with vibes. The test compares carrying amount with recoverable amount, using the level that actually generates independent cash inflows. Shortcut Book a prudent percentage haircut. An impairment conclusion users can understand. Recoverability is proven by supported cash flows or market evidence, not by management mood. Trigger…

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