Impairment Documents

Both the impairment loss and gain are recorded in a contra-account to the asset for both accounting standards, but with ASC 842, the accumulated depreciation at the beginning of the period of the asset impairment loss is cleared to the balance sheet:

  • Impairment losses in IFRS 16 and GASB 87 are recorded as:
    • A debit entry in the Impairment Loss/Gain (P&L) account
    • A credit entry in the Accumulated Impairment Loss /Gain (B/S) account
  • Impairment gains in IFRS 16 and GASB 87 are recorded as:
    • A credit entry in the Impairment Loss/Gain (P&L) account
    • A debit entry in the Accumulated Impairment Loss/Gain (B/S) account
  • Impairment losses in ASC 842 are recorded as:
    • A debit entry in the Impairment Loss/Gain (P&L) account
    • A debit entry in the Accumulated Depreciation account
    • A credit entry in the Accumulated Impairment Loss /Gain (B/S) account

The retirement documents generated for impaired assets will have an additional debit entry for Accumulated Impairment, as well as an additional credit entry for Accumulated Impairment in a Purchase Option scenario.

See also:  

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