As 28, impairment of assets

Indian Accounting Standards 4539 views 4 replies

Can some one help me to understand about Bottom up and Top down tests?

Thanks in advance.

Replies (4)

Well top down test says that we need to test goodwill/ assets with indefinite lives at the lowest of the cash generating unit level to which it belong and not at the level of whole company or department.

In case where the assets are not capable of being individually tested of impairment at their level (example: patent, goodwill) then in such case, identify the CGU to which this asset belong. After identifying compare the recoverable value of whole CGU with the carrying value of this particular asset and then conclude on its impairment. This is called Bottom up approach.

Thanks alot for the explanation.

 

if goodwill can be distributed then Bottom up test will applicable.

 

if goodwill can not  distributed then Top down tests will applicable.

i having job in finance pvt.ltd.company. we have two floor of the building as rented by the person who are relative of the directors. so, i ask that we how to implicate of as 28 (impairment of assets)


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