What it is
When events suggest a property may be worth less than its carrying amount, ASC 360 sets a two-step test. First, compare the carrying amount with the undiscounted cash flows the asset group will produce. Only if it fails is the loss measured, as the carrying amount less fair value. This workbook documents both steps by property.
The Indicators tab records six indicators by property and shows which properties need the test. The Test tab takes the carrying amount, five years of undiscounted cash flows, eventual disposition proceeds and fair value, then calculates the step 1 result, the impairment loss and the carrying amount after the loss.
When to use it
- At each reporting date, to document the indicator review for a property portfolio.
- When a property has a vacancy, a loss of a major tenant or a change in the hold plan.
- During an audit, as support for no impairment or for the amount recorded.
What’s inside
- Indicators tab: 25 properties by six indicators with a count and a conclusion
- Test tab: step 1 undiscounted cash flows and step 2 fair value with basis
- Impairment loss and carrying amount after the loss, with flags for missing cash flows or fair value
- Ties of the loss to the ledger and of the carrying amount before and after
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
At what level is the test done?
At the asset group: the lowest level for which identifiable cash flows are largely independent of other assets. For real estate that is often the property. Enter the carrying amount of the whole group.
Are cash flows discounted in step 1?
No. Step 1 uses undiscounted cash flows over the remaining useful life of the primary asset plus the eventual disposition. Fair value, in step 2, reflects market participant assumptions.
Can an impairment loss be reversed?
No. For assets held and used, the loss establishes a new cost basis and is not reversed if the value recovers.
Related templates
- Audit Program: Real Estate Entity
- Real Estate Owner and Operator Audit Checklist
- Disclosure Checklist: Fair Value Measurements (ASC 820)
- Real Estate Straight-Line Rent Schedule (Lessor)
Last updated 11/05/2026. All free templates.