Bringing impairment under one umbrella: the ASB has put the requirements for impairment testing for tangibles and goodwill in one paper

Article Abstract:

The Accounting Standards Board has integrated the impairment proposals in Financial Reporting Exposure Draft (FRED) 12 'Goodwill and Intangible Assets' and the discussion paper 'Impairment of Tangible Fixed Assets' into one proposed standard, FRED 15 'Impairment of Fixed Assets and Goodwill.' It decided to develop a single standard for both tangible and intangible assets because the impairment testing process for the two is nearly the same. However, FRED 15 differs from the discussion paper in two ways. First, FRED 15 proposals have been aligned with those contained in FRED 14 'Provisions and Contingencies.' Second, the new standard requires that tax generated by an impairment be reflected in the deferred tax balance instead of being netted off the asset value. FRED 15 has many similarities with the International Accounting Standard Committee's E 55 'Impairment of Assets.'

Intangible property, Intangible assets

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Pensions: same subject, different approach

Article Abstract:

The UK's Accounting Standards Board (ASB) presents its position on how pension plan assets and liabilities should be measured in its second discussion paper on accounting for pension costs. The paper explains that the ASB is ready to abandon actuarial valuations of pension-plan assets in favor of market valuation in line with internationally-accepted practice. This is because the Board believes that market values are increasingly used by the actual profession and that it would be prudent to subscribe to international practice. The paper also articulates the ASB's disagreement with International Accounting Standard No 19, 'Employee Benefits,' and the US Financial Accounting Standard No 87, 'Employers' Accounting for Pensions,' on how discount rates for pension liabilities should be calculated. Other issues discussed in the document are presented.

Pension, health, and welfare funds, Pension Funds & Benefit Plans, Pension Funds, Pensions

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Impairment of tangible fixed assets

Article Abstract:

The Accounting Standards Board's (ASB) latest discussion paper seeks to provide guidelines on the identification, measurement, recognition and presentation of impairments of tangible fixed assets in a manner that is objective, straightforward and not burdensome for account preparers. It stemmed out of other ASB initiatives that pointed out that principles governing impairment of goodwill and intangible assets were also applicable to tangible assets. The formulation of the discussion paper was also prompted by the need for a paper to counterbalance the Discussion Paper 'Provisions,' which limits the recognition of expected future costs. The latest discussion paper does not recommend the annual calculation of the recoverable amount of each tangible fixed asset because this is onerous for preparers of accounts.

Financial statements

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