Test anfragen
An impairment test determines whether an asset’s carrying amount exceeds its recoverable amount. Under IFRS IAS 36, recoverable amount is the higher of value in use and fair value less costs of disposal. Goodwill and certain intangible assets require annual testing, while other assets are tested when impairment indicators arise.
The impairment test is an important accounting instrument used to determine the actual value of assets. It is subject to the regulations of the IFRS (International Financial Reporting Standards) or the German-GAAP (German Commercial Code) and plays a central role in determining whether an asset is impaired and requires impairment. According to IFRS IAS 36, an impairment exists if the carrying amount of an asset or cash-generating unit exceeds its recoverable amount. Recoverable amount is the higher of fair value less costs of disposal and value in use. In the German-GAAP, the impairment of assets is regulated in Section 253 German-GAAP.
IFRS prescribes an annual impairment test for goodwill and certain intangible assets; the date can be freely chosen for the first test, but thereafter it must always be carried out on this date. Other assets are subject to the impairment test if there are indications of impairment and thus amortization.
The impairment test in accordance with IFRS involves estimating the recoverable amount of an asset, which is determined on the basis of fair value less costs of disposal or value in use. Performing the test requires the use of sound assumptions, such as future cash flows, discount rates and growth rates. It is important to perform sensitivity analyses to assess the impact of changes in assumptions.
The German-GAAP impairment test differs from the IFRS impairment test in a number of ways. Under the German-GAAP, the regulations on the impairment of assets are set out in Section 253 German-GAAP. A special feature of the German-GAAP is that an impairment loss is only recognized if there is a permanent loss in value. In contrast to IFRS, German-GAAP does not require companies to carry out an impairment test if there are no indications of possible impairment. Under German GAAP, the recognition of impairment depends on the type of asset and the applicable requirements of the German Commercial Code (HGB). Unlike IAS 36, German GAAP does not establish a general impairment-testing model based on recoverable amount for all assets.
Various valuation methods are used to carry out the impairment test. These include, for example, the value in use method, the fair value / market-based method - where applicable, or the present value method. Each method has its advantages and disadvantages as well as its specific area of application. The selection of the appropriate method should be based on a well-founded analysis and consideration in order to achieve meaningful results and meet the requirements of the accounting standards.
The impairment test is not mandatory for all assets. Its application depends on the specific accounting standards and company guidelines. Companies must carry out a careful assessment to determine which assets are subject to possible impairment and are therefore subject to the impairment test so that an impairment loss can be recognized.
A detailed analysis of the key valuation principles is of great importance. This includes the selection and justification of assumptions, discount rates, cash flow forecasts and other factors that must be taken into account when valuing assets. The valuation principles should be based on current information and enable a realistic assessment of future developments. The transparency and comprehensibility of the underlying assumptions is of great importance to ensure the robustness of the impairment test.
An important area of application of the impairment test is the valuation of goodwill. Goodwill arises when a company acquires goodwill that exceeds the carrying amount of the identifiable assets and liabilities. Under both IFRS and German-GAAP, companies must regularly allocate goodwill to recoverable (substantive) assets, known as cash-generating units (CGUs), and carry out an impairment test. The valuation of goodwill requires the application of suitable valuation methods such as a comparison with fair value or the value in use method.
When performing an impairment test, various errors can occur that may be objected to by auditors or regulators. Here are some common errors:
Financial experts should continuously inform themselves about current developments, changes in guidelines and case law and adapt their practices accordingly in order to meet the requirements of the impairment test.
The IDW RS HFA 40 published by the Institute of Public Auditors in Germany (IDW) in June 2015 entitled "Individual questions on impairment of assets in accordance with IAS 36" is also helpful. It addresses frequently occurring uncertainties in relation to specific application issues of IAS 36. By providing precise guidelines and explanations, it is intended to support financial experts in achieving greater clarity and accuracy in the application of IAS 36.
IAS 36 remains subject to ongoing standard-setting discussions. In 2026, the IASB continued deliberations on proposed changes concerning value-in-use cash flows and related disclosure requirements (cf. IASB, 2026). These developments should be monitored when preparing or reviewing impairment tests .
The impairment test in accordance with IAS 36 (IFRS) and the German-GAAP is an important part of accounting and helps companies to identify impaired assets. Careful execution of the test, taking into account the relevant regulations, valuation methods and pitfalls, is crucial to achieving accurate and meaningful results. Companies should ensure that they have high quality data, make sound assumptions and document the test appropriately to meet the requirements of accounting standards. smartZebra supports impairment testing with market data relevant to discount rates, peer groups, growth assumptions and other valuation inputs.
Updated at 10 August 2026
An impairment test in accordance with IFRS is required annually for goodwill and certain intangible assets. Other assets are subject to the test if there are indications of impairment.
Under German-GAAP, impairment is only required in the event of a permanent loss in value, whereas IFRS requires regular tests even without direct indications of impairment.
Frequently used methods are the value in use method, the comparative method and the present value method. The choice of method depends on the specific situation of the asset.
Typically, these are property, plant and equipment, financial assets, intangible assets and goodwill.
Common errors include inadequate assumptions, lack of sensitivity analysis, failure to recognize impairment indicators, lack of documentation and non-compliance with accounting standards.
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