Impairment Studies for Tangible Assets

To ensure that assets carry no more than their recoverable amount.

Recoverable amount is higher of an assets net selling price and its value in use.

Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of useful life.

Net selling price is the amount obtainable from sales of assets in arms length transaction being knowledgeable, willing parties , less the Cost of disposal.

Cost of disposal are increment costs directly attributable to the disposal of an asset, excluding finance cost and income tax expense.

An impairment loss is the amount by which carrying amount of an asset exceeds its recoverable amounts.