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AASB 136 Impairment of Assets
Australia (Commonwealth)
vCompiled AASB 136 Impairment of Assets, Compilation No. 5, Authorised Version F2026C01108 registered 28 October 2026 (compilation date 30 June 2026; incorporating amendments to 28 January 2026 including AASB 2026-1; applies to annual periods that begin from 1 July 2026 and before 1 January 2029); principal Standard F2015L01622 made 14 August 2015
7 domains
27 controls
The Australian adoption of IAS 36: when an entity must test an asset or cash-generating unit for impairment, how recoverable amount is measured as the higher of fair value less disposal costs and value in use (projection basis, excluded cash flows, pre-tax discount rate), how goodwill and corporate assets are allocated and tested, how impairment losses are recognised, allocated within a unit and reversed, and the disclosures about losses, units and the key assumptions and sensitivities behind goodwill tests, with the not-for-profit modifications.
Verified
AASB 136 Impairment of Assets is a compliance framework from Australia (Commonwealth) with 7 domains and 27 controls. The largest domains are 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 (9 controls), Cash-generating units, goodwill, corporate assets and non-controlling interests (paragraphs 65 to 108, Appendix C) – AASB 136 Impairment of Assets (7 controls), Disclosure (paragraphs 126 to 137, Appendix E) – AASB 136 Impairment of Assets (3 controls). Every control below carries what it requires and what an assessor expects to see.
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Framework Domains (7)
Cash-generating units, goodwill, corporate assets and non-controlling interests (paragraphs 65 to 108, Appendix C) – AASB 136 Impairment of Assets
7 controls
| Code | Title |
|---|---|
| aasb-136-impairment-of-assets::100-103 | Corporate assets: identify every corporate asset relating to the unit under test; allocate the portion of its carrying amount that can be allocated reasonably and consistently to the unit and test the unit including it; where it cannot be allocated, test the unit without it, then identify the smallest group of units to which it can be allocated and test that group including the allocated portion |
| aasb-136-impairment-of-assets::104-108 | Impairment loss for a unit: recognise it only when the unit's recoverable amount is below its carrying amount, allocate it first to goodwill and then to other assets pro rata by carrying amount, never reducing an asset below its fair value less disposal costs, its value in use or zero, whichever is highest, treating each reduction as an individual asset loss; recognise any remainder as a liability only if another Standard requires |
| aasb-136-impairment-of-assets::66-73 | Identify the cash-generating unit: where an individual asset's recoverable amount cannot be determined, test the smallest asset group with largely independent cash inflows, judged by how management monitors operations and makes continuation or disposal decisions; a group whose output could be sold on an active market is a unit even if the output is consumed internally, with transfer prices replaced by arm's length estimates; identify units consistently |
| aasb-136-impairment-of-assets::74-79 | Determine a unit's carrying amount on the same basis as its recoverable amount: include only assets attributable directly, or allocated reasonably, to the unit that produce its cash inflows, exclude recognised liabilities unless recoverable amount cannot be determined without them, and adjust for any other assets or liabilities included in the recoverable amount for practical reasons |
| aasb-136-impairment-of-assets::80-87 | Allocate acquired goodwill from the acquisition date to the units or groups of units expected to benefit from the combination's synergies, at the lowest level at which management monitors goodwill and no larger than an operating segment before aggregation; finish the allocation by the end of the following annual period; on disposal of an operation or a reorganisation, reallocate goodwill on relative values unless a better method is demonstrated |
| aasb-136-impairment-of-assets::88-99 | Test units with goodwill: a unit to which goodwill relates but is not allocated is tested when indicators arise, excluding goodwill; a unit with allocated goodwill is tested annually and on any indicator by comparing its carrying amount including goodwill with recoverable amount; test at the same time each year and within the year of acquisition, test individual assets and lower units first, and carry forward a prior calculation only under the three conditions |
| aasb-136-impairment-of-assets::AppC-C1-C9 | Partly owned units with goodwill: where non-controlling interests are measured at their proportionate share of net assets, gross up the unit's goodwill for the goodwill attributable to them before comparing with recoverable amount, allocate any loss between parent and non-controlling interests in the profit-sharing proportions, and recognise only the parent's share of a loss on unrecognised goodwill |
Disclosure (paragraphs 126 to 137, Appendix E) – AASB 136 Impairment of Assets
3 controls
| Code | Title |
|---|---|
| aasb-136-impairment-of-assets::126-129 | Disclose by asset class the impairment losses and reversals charged or credited to profit or loss with their line items and those taken through other comprehensive income on revalued assets, and by reportable segment the losses and reversals, split between profit or loss and other comprehensive income |
| aasb-136-impairment-of-assets::130-133 | For each material impairment loss or reversal on an individual asset or unit disclose the events and circumstances, the amount, the nature of the asset or a description of the unit (including any change in how it is aggregated), the recoverable amount and its basis, the fair value hierarchy level, valuation technique and key assumptions with discount rates for fair value less disposal costs, or the discount rates for value in use; disclose main classes and events for aggregate immaterial losses, and any goodwill still unallocated with the reasons |
| aasb-136-impairment-of-assets::134-137 | For each unit whose allocated goodwill or indefinite-life intangibles are significant, disclose their carrying amounts, the basis of recoverable amount, and for value in use each key assumption, management's approach to setting it (past experience or external sources and how it differs), the projection period with justification beyond five years, the extrapolation growth rate with justification above the long-term average, and the discount rates; for fair value less disposal costs the technique, key assumptions, approach, hierarchy level, changes in technique, and for discounted cash flow methods the period, growth rate and discount rates; and the sensitivity information where a reasonably possible movement would remove the headroom; give aggregate disclosures for units with individually insignificant amounts sharing key assumptions |
Identifying possible impairment: indicators and annual tests (paragraphs 7 to 17) – AASB 136 Impairment of Assets
3 controls
| Code | Title |
|---|---|
| aasb-136-impairment-of-assets::12-14 | Minimum indicators of impairment: external (unexpected value decline, adverse technological, market, economic or legal change, higher market rates affecting the discount rate, net assets above market capitalisation), internal (obsolescence or damage, adverse change in use including idling, restructuring, early disposal or a finite life reassessment, worse-than-expected performance) and dividends from investees exceeding their income or the investor's carrying amount exceeding the investee's net assets |
| aasb-136-impairment-of-assets::15-17 | Apply materiality in deciding whether to re-estimate recoverable amount where earlier calculations showed ample headroom or insensitivity to an indicator, and treat any indicator as a trigger to review remaining useful life, depreciation method and residual value whether or not a loss results |
| aasb-136-impairment-of-assets::8-11 | Assess at every reporting date whether any indicator of impairment exists and, if so, estimate recoverable amount; regardless of indicators, test indefinite-life and not-yet-available intangibles and acquired goodwill at least annually, at the same time each year, and within the year of first recognition |
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
9 controls
| Code | Title |
|---|---|
| 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 |
| aasb-136-impairment-of-assets::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 |
| aasb-136-impairment-of-assets::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 |
| aasb-136-impairment-of-assets::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 |
| aasb-136-impairment-of-assets::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 |
| aasb-136-impairment-of-assets::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 |
| aasb-136-impairment-of-assets::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 |
| aasb-136-impairment-of-assets::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 |
| aasb-136-impairment-of-assets::55-57,A15-A21 | Discount rate: use a pre-tax rate reflecting the market's current pricing of money's time value and of asset-specific risks not already in the cash flows, derived from market rates for comparable assets or the cost of capital of a comparable listed entity, or from surrogates such as the entity's own cost of capital, incremental borrowing rate or other market rates adjusted for asset risk, country, currency and price risk and unaffected by the entity's capital structure |
Objective, scope and definitions (paragraphs 1 to 6, Aus5.1, Appendix D) – AASB 136 Impairment of Assets
1 controls
| Code | Title |
|---|---|
| aasb-136-impairment-of-assets::2-5,Aus5.1 | Scope: apply the Standard to impairment of every asset except the nine listed categories covered by other Standards; it does apply to investments in subsidiaries, associates and joint ventures and to revalued assets, and for not-for-profit specialised service assets only under the cost model |
Recognising and measuring the impairment loss on an individual asset (paragraphs 58 to 64, Aus61.1) – AASB 136 Impairment of Assets
1 controls
| Code | Title |
|---|---|
| aasb-136-impairment-of-assets::59-64,Aus61.1 | Recognise an impairment loss when recoverable amount is below carrying amount by writing the asset down to recoverable amount, immediately in profit or loss, or as a revaluation decrease where the asset is carried at a revalued amount (against the asset's surplus, or the class surplus for not-for-profit entities); recognise a liability for any excess only if another Standard requires; then re-base future depreciation and deferred tax |
Reversing an impairment loss (paragraphs 109 to 125, Aus120.1) – AASB 136 Impairment of Assets
3 controls
| Code | Title |
|---|---|
| aasb-136-impairment-of-assets::110-116 | Reversal assessment: at each reporting date look for indications that an earlier impairment loss on an asset other than goodwill no longer exists or has decreased (value increase, favourable environment changes, lower market rates, favourable changes in use including enhancement spend, better-than-expected performance); reverse only where the estimates used to determine recoverable amount have changed, never for the mere unwinding of the discount |
| aasb-136-impairment-of-assets::117-121,Aus120.1 | Reversal for an individual asset: never raise the carrying amount above what it would have been net of depreciation or amortisation had no loss been recognised, recognise the reversal in profit or loss, or as a revaluation increase where the asset is carried at a revalued amount, taken through other comprehensive income (with profit or loss recognition to the extent the earlier loss was expensed; class basis for not-for-profit entities), and re-base future depreciation |
| aasb-136-impairment-of-assets::122-125 | Reversal for a unit and for goodwill: allocate a unit's reversal to its assets other than goodwill pro rata by carrying amount, capped per asset at the lower of its recoverable amount (if determinable) and its depreciated no-impairment carrying amount with any excess reallocated to the other assets; never reverse an impairment loss on goodwill |
What is AASB 136 Impairment of Assets and who does it apply to?
AASB 136 Impairment of Assets is a compliance framework from Australia (Commonwealth) with 7 domains and 27 controls. The Australian adoption of IAS 36: when an entity must test an asset or cash-generating unit for impairment, how recoverable amount is measured as the higher of fair value less disposal costs and value in use (projection basis, excluded cash flows, pre-tax discount rate), how goodwill and corporate assets are allocated and tested, how impairment losses are recognised, allocated within a unit and reversed, and the disclosures about losses, units and the key assumptions and sensitivities behind goodwill tests, with the not-for-profit modifications. It is used by organisations to establish and maintain compliance with industry standards and regulatory requirements.
What does AASB 136 Impairment of Assets actually require?
AASB 136 Impairment of Assets has 27 controls organised across 7 domains. The largest domains are 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 (9 controls), Cash-generating units, goodwill, corporate assets and non-controlling interests (paragraphs 65 to 108, Appendix C) – AASB 136 Impairment of Assets (7 controls), Disclosure (paragraphs 126 to 137, Appendix E) – AASB 136 Impairment of Assets (3 controls). Each control defines specific requirements that organisations must implement to achieve compliance.
If I already comply with another framework, how much of AASB 136 Impairment of Assets do I already cover?
AASB 136 Impairment of Assets does not currently have cross-framework mappings in our system. Check back as we continuously expand our mapping database.
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