how to measure Recover ability of the carrying amount?

Question

please with examples , thanks
2- what the differents between expense and asset ?

Answer 1

An expense goes into the income statement for determining the profit. Revenues less expenses = profit. Assets go into the balance sheet. They're things that belong to you. They're totally different things altogether.

Terms like recoverable amount, carrying amount are defined in IAS 36 Impairment of Assets.

Carrying amount is the amount at which an asset is recognised after deducting any accumulated depreciation (amortisation) and accumulated impairment losses thereon.

A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its value in use.

Fair value less costs to sell is the amount obtainable from the sale of an asset or cash-generating unit in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.

Value in use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit.

This is not an easy IAS to explain unfortunately. Hopefully you'll never have to do all those complicated calculations. The easiest e.g. is a property. If you get a valuation and it's higher than the carrying value, then the recoverable amt > carrying value and there's no impairment. If you cannot get a valuation, you'll have to compare the cash flows from rental revenue and compare to the holding cost to see if there's a net cash inflow or outflow.

Answer 2

Try here.

http://books.google.com/books?id=17BlNV19As8C&pg=PT420&lpg=PT420&dq=how+to+measure+recoverability+of+the+carrying+amount&source=web&ots=vIlSn3-1PY&sig=5zfxJeHC4ygvsN-SE-6PlMPQ7g0#PPT420,M1