Impairment of ROU asset + Fixed assets

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Xandrea
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Joined: 05 Jul 2021, 08:45

Impairment of ROU asset + Fixed assets

Post by Xandrea »

Hi All

In assessing the recoverable amount of rou asset + fixed asset, a cashflow forecast of 5 yrs + terminal is prepared. The ROU asset has a remaining of 1 yr life as at year end and constitute 80% of the total assets. Currently, an extension of lease assets is expected. However this extension of lease assets will be scope out of ifrs16 given that the renewal is structured on variable basis. ie % of sales.

In this case, is it still appropriate to forecast the cash flow based on a period of 5 yr + terminal in arriving at the recoverable amount for impairment assessment? Or should forecast based on the remaining life of rou which us one yr 1?

Thanks for guidance in advance.
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Marek Muc
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Re: Impairment of ROU asset + Fixed assets

Post by Marek Muc »

then it doesn't seem to use a period longer than 1 year if the asset will be derecognised after 1 year

what kind of cash inflows are generated by those assets? are they independent of other assets? i.e. did you identify the composition of CGU correctly:
https://ifrscommunity.com/knowledge-bas ... units-cgu/
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