how to "Adjust depreciation for future periods under [IAS 36.63]?

Question

give me example to illustraite

Answer 1

IAS 36.63 After the recognition of an impairment loss, the depreciation (amortisation) charge for the asset shall be adjusted in future periods to allocate the asset’s revised carrying amount, less its residual value (if any), on a systematic basis over its remaining useful life.
It's easiest to explain with an example. Let's say you have an asset with initial cost of $100,000, residual value of $2,000 and an estimated useful life of 10 yrs. So depreciation each yr was (100,000 - 2,000)/10 = 9,800. You've depreciated this asset for 2 yrs (accd depn is $19,600) and carrying value is 80,400. You carry out a test for impairment and determined that the asset is worth only $50,000, so you recognise an impairment loss of $30,400. You also determine that the remaining useful life is not 8 yrs, but only 5 yrs, and it also would no longer have any residual value. So IAS 36.63 requires you to adjust depn for future periods as follows - take the new carrying value ($50,000) and divide by the new remaining useful life - 5 yrs. So for each of the next 5 yrs, your depn charge would be 10,000.