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Double entry for recording impairment loss?

What are the accounting entries to be posted in the case of an impairment loss?

asked Dec 11, 2012 in IAS 36 - Impairment of Assets by anonymous
recategorized Jan 13, 2013 by Mysio

4 Answers

+1 vote
Best answer
Impairment loss is recognized immediately in P&L  (unless the asset is carried at revalued amount) Thus, entries would be:

Dr  Impairment losses a/c (P&L account)
Cr  Asset account a/c (Balance sheet account)

If the asset is carried at revalued amount, impairment loss is treated as a reduction in revaluation gain.

Dr  Revaluation surplus (B/S account)
Cr  Asset account a/c (B/S account)

Reference: IAS 36 - Impairment of Assets
answered Jan 27, 2013 by AcMac IFRS Senior (4,170 points)
edited Dec 13, 2013 by Mysio
+1 vote
It can be accounted for as follows in books:

DR-Impairment loss a/c (P&L account)
CR-Asset Account/Provision for impairment loss  a/c (Balance sheet account)
answered Dec 16, 2012 by Tina IFRS Expert (9,760 points)
edited Dec 13, 2013 by Mysio
Yes its correct!
+1 vote
Dr - Impairment expense (P&L)
Cr - Asset  (B/S)
answered Dec 26, 2012 by AndyK IFRS Senior (3,850 points)
edited Dec 13, 2013 by Mysio
0 votes
Dr - Impairment Charge (P&L Expense a/c)
Cr - Provision for Impairment losses (B/S)
answered May 20, 2013 by Mysio IFRS Guru (13,900 points)

Frequently asked questions about International Financial Reporting Standards (IFRS)

What is IFRS? - IFRS is a set of Accounting standards developed by the IFRS Foundation which is an independent, not-for-profit organization working in the public interest.

What are IASB & FASB? - IASB means the International Accounting Standards Board, which is the independent, accounting standard-setting body of the IFRS Foundation. IASB has 14 Board members who are selected as a group of experts with a mix of experience of standard-setting, preparing and using financial statements together with academic excellence. The IASB was founded on April 1, 2001 as the successor to the International Accounting Standards Committee (IASC). On the other hand, FASB means the Financial Accounting Standards Board which responsible for setting accounting standards for public companies in the U.S. FASB is not directly involved with IFRS but responsible for establishing and improving US GAAP.  

What is the difference between IFRS & IAS? - International Accounting Standards Committee (IASC) was responsible for developing International Accounting Standards (IAS) before 2001. IASC was renamed as The International Accounting Standards Board (IASB) in 2001. Consequently the standards issued thereafter are known as IFRS. Therefore all the standards issued after 2001 are IFRS. The previous IAS are still valid but are being gradually superseded by new IFRS.

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What are the advantages of IFRS? - Global application of IFRS will make the comparison of financial statements easier for foreign investors which is advantageous for companies to attract investors.