Impairment of Assets Audit Working Paper
IMPAIRMENT OF ASSETS — AUDIT WORKING PAPER (IND AS 36)
Entity: {{client_name}} · Period ended: {{period_end}}
A. Impairment Indicator Screening (Ind AS 36 para 12)
- External indicators: significant decline in market value beyond normal use, adverse changes in the technological/market/economic/legal environment, increase in market interest rates affecting the discount rate, entity's market capitalisation below net asset carrying value.
- Internal indicators: evidence of obsolescence or physical damage, significant adverse changes in the asset's use (idle, discontinuation plans, restructuring), evidence from internal reporting that economic performance is worse than expected.
- Note: goodwill and indefinite-life intangibles require an ANNUAL impairment test regardless of whether an indicator exists.
B. Cash-Generating Unit (CGU) Identification
Where an asset does not generate cash inflows largely independent of other assets, identify the smallest group of assets that does — the CGU. Test that CGU identification is consistent with prior periods unless a change is justified and disclosed.
C. Recoverable Amount Test
Recoverable amount = higher of Fair Value less Costs of Disposal (FVLCD) and Value in Use (VIU).
| Asset / CGU | Carrying amount (₹) | FVLCD (₹) | VIU (₹) | Recoverable amount (higher of FVLCD/VIU) (₹) | Impairment loss, if any (₹) |
|---|
| | | | | |
| | | | | |
| | | | | |
For VIU: test the cash flow projections (based on reasonable/supportable assumptions, most recent budgets/forecasts, typically capped at 5 years unless a longer period is justified) and the discount rate (a pre-tax rate reflecting current market assessments of the time value of money and asset-specific risks).
D. Reversal of Prior Impairment
Test whether any indicator suggests a previously recognised impairment loss (other than goodwill, which can NEVER be reversed) may no longer exist or may have decreased — and that any reversal does not increase the carrying amount above what it would have been (net of depreciation) had no impairment been recognised.
E. Conclusion
Conclusion on completeness of indicator screening, appropriateness of CGU identification, and recoverable-amount computation: ____________________________________________
Prepared by: ______________ Date: 31 July 2026
Reviewed by: ______________ Date: ______________
