as per Accounting standard 28 impairment of assets what actually this accounting standards states that what is the purpose of usage this accounting standard
Give me a Practical exanation please
It gives treatment of impairment. Meaning you usually do this like Carrying amount of asset - depreciation. Here when a machine underperforms, its treated as impairment and thats taken out as
Carrying amount-depreciation-impairment
Dr. Impairment loss
Cr. Asset
This happens when the carrying amount of the asset is more than recoverable amount.
Recoverable amount is higher of its VIU or FVLCS
VIU is present value of future cashflows FVLCS is the amount that can be recovered when you sell it which also excludes sellng costs
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