IAS 36: what does it mean exactly? You will find that out in this article.

The concept of IAS 36 can sometimes be tricky. But fortunately, we were created to make it a little easier in some cases. IAS 36 is a concept. There are many financial institutions that find it difficult to understand these principles. However, that doesn’t make it any less important to get to the heart of it. After all, this is a legal requirement that you cannot avoid. We are going to look at it step by step. In addition, we will also name some other concepts, all of which are described separately alongside this article.

The core of IAS 36 and other concepts

The main principles of IAS 36 will now be explained first. Let us then start with the most important principle. The key principle of IAS 36 is that the presentation of assets in a given financial statement should not exceed the highest amount that could possibly be recovered if they were used, or if a sale were to take place.

If the latter were to occur, the asset could be described as impaired. This would imply that an impairment has occurred. We have in this concept IAS 36, which describes the steps to be taken by entities at the end of the reporting period.

An impairment loss can be recognized, that’s also part of the IAS principle. It works as follows. When we talk about the recognition of an impairment loss, we are talking about the IAS 36 principle and then when there is an impairment loss, it is confirmed as well as accumulated. Journal entries are used in such a case, in order to be able to record the value of the assets. Not only recording, but also revaluation is a goal here. In this context, pay close attention to the fact that such an impairment loss created by goodwill may never be reversed. This is prohibited and strictly controlled.

What else does IAS 36 do and where can I read further information?

As announced, there are other concepts that IAS applies to. We list them here first. IAS 10 is for events after the reporting period, IAS 16 is for property, plant and equipment. Then we also have IAS 38 which is for intangible assets, IAS 41 for agriculture. On top of that, there are many methods that we are familiar with, such as IFRS and in addition the FRCs. These will be discussed again later.

Need more information about IAS 36?

It may be that it is not yet entirely clear what IAS 36 refers to. That’s no problem, we can of course provide you with more explanation. If you need more useful information, guidance and other questions, please let us know. We would love to hear from you!

Do you want to know even more? Then it is recommended that you visit the following website: www.annualreporting.info. You will find the information you need there. Whether you are studying, working or doing something else: all questions are of course welcome! Let us know and we will get back to you as soon as possible.