Impairment Losses after Comparison Between Book Values and Recoverable Values of Non-Current Assets and its Impact on the Content of the Financial Statements
Keywords:
Book values of non-current assets, recovery values of non-current assets, content of financial statementsAbstract
The research aims to identify the possibility of applying the International Accounting Standard (36) related to the loss of impairment in the value of non-current assets on the Baghdad Soft Drinks Company and the effect of applying this standard on the form and presentation of the financial statements, which can reflect the reality of the financial position of the economic unit and in a way that is appropriate for the information that can be provided by financial reports to make decisions of stakeholders,
As the financial statements were studied and analyzed and indicators of decline were identified in the research sample company and the extent to which the financial statements were affected by based on the application of the international standard (36), it was determined that the firm had suffered a loss due to a drop in the value of its non-current assets. However, this loss was not reported when applying procedures and methods Referred to by the standard for decreases in the value of non-current assets brought on by impairment, which consisted of these procedures by calculating the discount rate according to the cost of capital assets method, in addition to calculating the cash flows expected to be obtained from fixed assets and discounting these flows with the discount coefficient that was previously calculated. This decrease was compared with the value Bookkeeping shows a decrease in the value of non-current assets.
After calculating the decline, this loss was recognized and disclosed, which led to a change in the form and presentation of the financial statements.
Downloads
References
Financial Accounting Standards Board,(2008),SAFS 144,( Impairment of long-term assets), Norwalk, Connecticut,US.
Dudycz, Tadeusz. Praznikow, Jadwiga,(2018), Does the mark-to-model fair value measure make assets impairment noisy, Wrocław University of Science and Technology,Faculty of Computer Science and Management,Wyb. Wyspiańskiego 27, 50-370 Wrocław,Poland, This work was supported by the National Science Centre Poland [grant number: 2017/25/B/HS4/01374].
International Accounting Standards Board,(2008),IAS (36), ( Impairment of assets), Library of the International Accounting Standards Board,UK.
Anderson, Paul W.S., Intermediate Accounting, New Caste, Upon-Tyne, England, May, 2010.
FASB, Financial Accounting Standards Board, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, Statement of Financial Accounting Standards No. 121. Norwalk. CT, March 1995.
