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Booking an impairment charge for employee and other demo cars.


Is it necessary to book an impairment charge on company demonstrator (or employee use cars) and press cars when we are not certain of the NRV at the time we activate it as a demo? We are being told by audit that we need to reflect the fact that the use of the vehicle will result in a lower NRV in the end, which is often the case. We do allow for this anticipated reduction in the selling price through what we refer to as a "Special Discount", which is a reduction in the selling price which is above the line and not an impairment charge which is below the line and not attributable to that specific asset.

asked Aug 16 in IAS 36 - Impairment of Assets by ERC

1 Answer

0 votes
IT seems that cars is user inventory therefore there will not charged any impairment as IAS 36 does not deals with inventory. in the case of inventory cars will be recorded at lower of cost or NRV.
answered Oct 31 by Maher Ali Level 2 Member (4,360 points)


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