Monday, March 16, 2009

#74 Accounting entries to record impairment

Previously, we discussed about the objective of IAS 36- Impairment of Assets and all other related topics. We will proceed further on the accounting entries of impairment. Generally, upon recognition of impairment, the following entries should be passed:

Dr. Impairment Loss (Profit & Loss)
Cr. Provision for Dimunition in Value (Balance Sheet)

Provision for Dimunition in Value is a contra account to the existing asset account. For instance, the contra account of Stocks, in this case, is Provision for Stocks Obsolescence. The Provision for Dimunition in Value has properly disclosed the impact of impairment on the existing asset, that could be useful to financial statement users.


Anonymous said...

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Anonymous said...

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Kauditor said...

Hi Chin Chin,

We do not have registered MSN account at the momeny yet. Any query can be addressed to our email:

Anonymous said...

Good brief and this enter helped me alot in my college assignement. Thank you for your information.

Anonymous said...

it is spelt Diminution not Dimunition!