What the document covers
The bulletin links reduced cash-flow expectations to possible overstatement of asset carrying amounts. It discusses impairment assessment in the economic conditions surrounding its 2010 issue.
Specific requirements and implications
The bulletin warns against automatically treating a whole legal entity as one cash-generating unit when activities produce independent inflows. Profits are not an unexplained substitute for cash-flow projections, and a subsidiary's net assets may themselves contain impaired amounts. Auditors should challenge forecast volumes, prices, costs and discount rates, considering the economic conditions. An overall profitable company can still contain an impaired activity that is obscured by unrelated investment income.
Official source
A concise, independent Apex Gateway guide based on the official English source, not a reproduction of the complete document. Consult the original for full conditions, exceptions and subsequent updates.
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