impairment test

impairment test

At 30 June 2014, Longreach Ltd is considering undertaking an impairment test. Having only recently adopted the international accounting standards, the management of Longreach Ltd seeks your advice in relation to this test under AASB 136 Impairment of Assets.

Required
Write a report to management, specifically explaining:
1. the purpose of the impairment test
2. how the existence of goodwill will affect the impairment test
3. the basic steps to be followed in applying the impairment test.

Note:
This is a question and answer basis, to get a good mark you need to answer the questions correctly.

Format:
Introduction – talk about the regulation.
Body: Questions itself
Conclusion

References:
Harvard Anglia, Minimum of 7 academic reference.