What does 55-57,A15-A21 require?

The rate or rates applied must be pre-tax and reflect the market's current pricing of money's time value and of the asset-specific risks that the cash flow estimates have not already absorbed; risks adjusted for in the cash flows are never reflected again in the rate. The ideal is the return investors would demand from an investment with equivalent amount, timing and risk, taken from current market transactions in comparable assets or from the capital cost of a listed entity whose sole asset or portfolio is comparable. Where no asset-specific market rate exists, the entity starts from surrogates such as its own cost of capital (for example via the capital asset pricing model), its incremental borrowing rate or other market borrowing rates, then adjusts them to the market's view of the asset's specific risks and strips out risks irrelevant to the asset or already in the cash flows, considering country, currency and price risk. The rate does not depend on how the entity is financed or how it paid for the asset, a post-tax basis is converted to pre-tax, and separate rates are used for different periods where period-specific risks or the term structure of interest rates materially affect value in use.

AASB 136 Impairment of Assets 55-57,A15-A21: Discount...

Other controls in Measuring recoverable amount: fair value less disposal costs, value in use and the discount rate (paragraphs 18 to 57, Appendix A) – AASB 136 Impairment of Assets

18-23 Recoverable amount principles: it is the higher of fair value less disposal costs and value in use, only one needs measuring if it exceeds carrying amount, value in use may stand alone where fair value cannot be reliably measured and vice versa, and recoverable amount is measured per asset unless the asset's cash inflows are not largely independent, in which case per cash-generating unit
24 Carry forward the prior detailed recoverable amount calculation for an indefinite-life intangible only if its unit's assets and liabilities have not changed significantly, the prior calculation showed comfortable headroom over carrying amount, and events since make a shortfall remote
28-29 Costs of disposal: deduct incremental costs directly attributable to disposal (legal costs, stamp duty and similar taxes, removal costs, costs of readying the asset for sale) other than those already recognised as liabilities, but not termination benefits or post-disposal downsizing costs
30-32 Value in use: reflect the expected future cash flows, their possible variability, the time value of money at the current risk-free rate, the price of bearing the asset's uncertainty and other market factors including illiquidity, either within the cash flows or within the discount rate, so that the result is the expected present value
33-38 Basis for cash flow projections: use reasonable and supportable assumptions representing management's best estimate with more weight on external evidence, start from the latest approved budgets or forecasts for at most five years unless a longer period is justified, exclude uncommitted restructurings and enhancements, and extrapolate beyond the budget period at a flat or falling growth rate capped at the long-term average for the product, industry, country or market unless a higher rate is justified
39-43 Composition of cash flows: include the inflows earned while the asset stays in use, the directly attributable or reasonably allocated outflows needed to earn them (day-to-day servicing, attributable overheads and remaining costs to finish an incomplete asset), and net disposal proceeds at the end of useful life; keep inflation treatment consistent with the discount rate; exclude inflows from independent assets and outflows for recognised liabilities
44-49 Project cash flows for the asset as it stands today: exclude the effects of restructurings the entity is not yet committed to and of future enhancements, include the benefits of a restructuring once committed under AASB 137 together with its provision, and include maintenance outflows and replacement of shorter-lived components as day-to-day servicing
50-54 Exclude financing cash flows and income tax from the projections, estimate end-of-life disposal proceeds on an arm's length basis using current prices for similar assets adjusted consistently for inflation, recognise that fair value ignores entity-specific synergies, rights and tax attributes, and estimate foreign currency cash flows in their own currency with a matching rate before translating at the spot rate

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The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.

MCP endpoint All AASB 136 Impairment of Assets controls