Description

Swiss GAAP FER 20 “Impairment” outlines methods of the impairment test and describes the consequences for the annual financial statement. This test is based on indicators reflecting a possible impairment of the individual assets impaired. If indicators exist, the recoverable amount has to be determined. An asset is impaired if its carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the net selling price and the value in use. The recoverable amount is to be determined for each individual asset (individual valuation of assets). If an asset does not generate cash flows independently from other assets, the recoverable amount of the smallest group of assets (cash generating unit) needs to be determined. The amounts of significant impairment losses and partial or full reversal of impairment have to be disclosed on a one-to-one basis in the income statement or in the notes. Events and circumstances leading to an impairment and partial or full reversal of the impairment have to be explained.