US GAAP versus IFRS
Impairment of long-lived assets, goodwill and intangible assets
Under both US GAAP and IFRS, long-lived assets are not tested annually, but rather when there are similarly defined indicators of impairment. Both standards require goodwill and intangible assets with indefinite lives to be reviewed at least annually for impairment and more frequently if impairment indicators are present.
In addition, both US GAAP and IFRS require that the impaired asset be written down and an impairment loss recognized. ASC 350, Intangibles — Goodwill and Other, and the Impairment or Disposal of Long-Lived Assets subsections of ASC 360-10, Property, Plant and Equipment, and IAS 36, Impairment of Assets, apply to most long-lived and intangible assets, although some of the scope exceptions listed in the standards differ. Despite the similarity in overall objectives, differences exist in the way in which impairment is reviewed, recognized and measured.
No further convergence is planned at this time.
The FASB has a project to simplify how an entity tests indefinite-lived intangible assets (other than goodwill) for impairment.
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