As- 28

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Ajay Kumar (Querist)
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26 January 2017 what is the objective of introduction of As- 28 when AS-10 already provides for downward revaluation of an asset...

Ajay Kumar

Ajay Kumar (Querist)
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26 January 2017 sir, you can file revised return return and can adjust such amount against tax payable

Ajay Kumar

Ajay Kumar (Querist)
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26 January 2017 sir, you can file revised return and adjust such amount against tax payable

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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14 July 2024 **AS 28 - Impairment of Assets** was introduced to provide guidance on impairment testing and recognition for all assets, whereas **AS 10 - Property, Plant, and Equipment** primarily focuses on the accounting treatment of property, plant, and equipment, including revaluation.

### Objectives of AS 28:

1. **Comprehensive Impairment Guidance:**
- AS 28 provides a comprehensive framework for the assessment and recognition of impairment losses on all assets, including tangible and intangible assets, financial assets, and investments in subsidiaries, associates, and joint ventures.

2. **Impairment Trigger Recognition:**
- The standard outlines the criteria for recognizing impairment losses, emphasizing the need for an impairment loss to be recognized when the carrying amount of an asset exceeds its recoverable amount. This ensures that assets are not carried at values greater than their recoverable amounts, thereby reflecting their true economic value in the financial statements.

3. **Consistency and Comparability:**
- AS 28 enhances consistency and comparability in financial reporting by providing clear guidelines on impairment testing methodologies, assumptions, and disclosures. This helps stakeholders assess the financial health and performance of an entity more accurately.

4. **Supplementary to AS 10:**
- While AS 10 allows for revaluation of property, plant, and equipment to fair value, AS 28 complements this by addressing impairment testing scenarios where the carrying amount of an asset may exceed its recoverable amount due to changes in economic conditions, technological obsolescence, legal changes, or other factors.

### Differences from AS 10:

- **Focus on Impairment:** AS 28 specifically deals with the impairment of assets, providing detailed guidance on when and how impairment losses should be recognized, measured, and disclosed.

- **Broader Scope:** AS 28 applies to all assets, not just property, plant, and equipment covered by AS 10. It encompasses tangible and intangible assets, financial assets, and investments in subsidiaries, associates, and joint ventures.

- **Recognition Trigger:** AS 28 emphasizes the recognition of impairment losses based on the assessment of recoverable amounts, which may differ from the revaluation approach under AS 10 where assets are revalued to fair value upwards.

### Conclusion:

AS 28 was introduced to address the need for a uniform and comprehensive impairment testing framework across all asset classes, ensuring assets are fairly valued and impairment losses are recognized in a timely manner. While AS 10 allows for revaluation of assets, AS 28 focuses on impairment testing and recognition to ensure the reliability and relevance of financial statements, enhancing transparency for stakeholders. Thus, both standards serve complementary purposes in asset valuation and impairment assessment within financial reporting frameworks.