Auditing Impairment of Long-Lived Assets, Including Goodwill – Identifying and Calculating Impairment Losses

Learning Objectives

• To describe typical assets subject to impairment, including finite and indefinite-lived assets.
• To identify indicators of impairment and recoverability testing for both tangible and intangible long-lived assets.
• To explain goodwill accounting and auditing risks.
• To discuss cash flow sensitivity analysis and consider different methods of cash flow.
• To analyze the measurement of impairment loss.

Course Description

Impairment of Assets seeks to ensure that an entity's assets are not carried at more than their recoverable amount (i.e. the higher fair value fewer costs of disposal and value in use). 

Except for goodwill and certain intangible assets for which an annual impairment test is required, entities are required to conduct impairment tests where there is an indication of impairment of an asset, and the test may be conducted for a 'cash-generating unit' where an asset does not generate cash inflows that are largely independent of those from other assets.

Long-lived assets may be finite or indefinite-lived, tangible or intangible. The carrying value of these long-lived assets should be evaluated at each measurement date to determine whether there is an impairment loss necessary due to declines in an asset's fair value. 

Major topics covered in this CPE Auditing webinar are:

• Indicators of impairment
• Steps in recoverability testing for long-lived assets held and used
• Grouping assets held and used
• Allocating impairment loss and disclosures
• Testing indefinite-lived intangibles for impairment, including goodwill
• Valuation techniques for determining a reporting unit’s fair value

This CPE webinar will describe the tips and techniques for determining whether an impairment loss risk exists, and how to calculate, record, and disclose any such loss.

Here is the link to your interests: CPE Courses for Certified Internal Auditors

Overview

• Steps to identify and measure impairment

  3 mins
• Relationship to useful lives

  16 mins
• Goodwill in an asset group

  29 mins
• Allocation of impairment loss

  46 mins
• Goodwill impairment testing simplified for all entities

  64 mins
• Assigning assets to a RU

  78 mins
• Annual period application

  95 mins