This guidance translate IPSAS 26 into practical public sector accounting guidance and explains how entities should identify cash-generating assets and cash-generating units, assess indicators of impairment, measure recoverable amount, recognise impairment losses, reverse impairment losses where appropriate, present impairment effects and prepare disclosures supported by illustrative examples, practical decision points, accounting entries and disclosure guidance.
The objective is to support accurate and consistent accounting for impairment of cash-generating assets. A statement of financial position should not report a cash-generating asset or cash-generating unit at an amount higher than the amount recoverable through use or disposal. Where the carrying amount is not supportable by the recoverable amount, an impairment loss is recognised.