The African Association of Accountants General (AAAG) released its Application Guidance on IPSAS 26: Impairment of Cash-Generating Assets in July 2026.
Developed for public-sector entities and practitioners implementing IPSAS across AAAG member countries, the guidance translates IPSAS 26 into practical procedures for identifying cash-generating assets and cash-generating units, assessing impairment indicators, measuring recoverable amount, and recognising, reversing and disclosing impairment losses.
It is particularly relevant to public entities operating commercial activities, including government-owned utilities, rental facilities, commercial laboratories, ports, parking facilities and fee-based trading units.
At the heart of the guidance is a straightforward principle: a cash-generating asset or cash-generating unit should not be carried at more than the amount recoverable through use or disposal. Where carrying amount exceeds recoverable amount, the difference is recognised as an impairment loss.
The guidance turns this principle into a practical implementation framework, covering impairment indicators, discounted cash-flow approaches, cash-generating units, discount rates and sensitivity analysis, together with worked examples, accounting entries, disclosure guidance, controls and year-end procedures. In doing so, it gives practitioners a structured basis for applying judgement, documenting assumptions and producing audit-ready evidence, while strengthening the reliability of financial reporting and supporting sounder management of commercially oriented public assets.
