What it is
For a held-and-used asset group, ASC 360 runs in two steps. First the group is tested for recoverability by comparing its carrying amount with the undiscounted cash flows expected from use and disposal. Only if it fails is the loss measured, as carrying amount less fair value.
This workbook logs the triggering indicators, sums the undiscounted cash flows over the remaining life, measures the loss, and allocates it to the assets that take part in proportion to carrying amount without going below any individually determinable fair value. It also resets annual depreciation on the new base and posts the entry.
When to use it
- When an indicator such as a market price decline, adverse use change or continuing losses appears.
- When documenting why a test was or was not required at year end.
- When allocating a group-level loss to individual asset classes for the fixed asset register.
What’s inside
- Indicators log with common indicators in plain words and a conclusion
- Asset group with carrying amounts, loss participation and fair value floors
- Ten-year undiscounted cash flow schedule with disposal proceeds
- Recoverability test, loss, two-pass allocation and revised depreciation
- Impairment entry
Standard cited
This template follows ASC 360. It is written in our own words, except for phrases the standard requires the document to contain, with [bracketed placeholders] for client details, amounts in USD and dates as MM/DD/YYYY. Check it against the current standard and your firm’s methodology before use.
Questions
Why are the cash flows undiscounted in step 1?
The recoverability test asks whether the carrying amount can be recovered through the cash flows the group will generate, so those flows are not discounted. Discounting enters only in measuring fair value when the group fails.
How is the asset group defined?
At the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. Describe the level on the Group tab.
How is the loss allocated?
Pro rata to the carrying amounts of the long-lived assets in the group, without reducing any asset below its individually determinable fair value. Goodwill and assets outside the test take No on the Group tab.
Can the loss be reversed?
Not for an asset held and used. The reduced carrying amount becomes the new cost basis and is depreciated over the remaining life.
Related templates
- Fixed Asset Rollforward (Excel)
- Audit Program: Fixed Assets
- Fixed Asset Additions Testing Workpaper
- Intangible Assets Rollforward Workbook (ASC 350)
Last updated 11/05/2026. All free templates.