You are a recent accounting graduate and have been employed in the Financial Reporting Unit of Myer Holdings Ltd, an ASX listed firm. Preparations are underway for the completion of the general purpose financial report for the year ended 29 July 2017 and you have been asked by the Chief Financial Officer to identify any major accounting issues which will need to be considered. Your attention is drawn to a media release by ASIC on 31 May 2017 (ASIC Media Release 17â€162) and this identifies areas of concern where attention will be directed in the ASIC surveillance program. Not surprisingly given a recent academic paper1 ‘impairment of assets’ receives specific mention. Required You are required to prepare a report for the CFO considering whether impairment of assets is an issue requiring address for the firm.
The report should, with reference to AASB 136:
a) With reference to Myer outline what evidence is there that impairment testing of assets is necessary;
b) With reference to Myer outline the processes required to be addressed in determining any asset impairments that might be necessary
c) With reference to Myer outline the information needed in determining asset impairments
d) Evaluate the flexibility management has available in the determination of asset impairments .