Tools · IAS 36
IAS 36 impairment test — value-in-use DCF
The year-end impairment test that every audited entity runs: project five years of free cash flows, discount at WACC, add a terminal value — and compare the result to what the CGU is carrying on the books. Green means headroom; red means write it down.
Projected free cash flows
| Year | Cash flow (AED) | Discount factor | Present value |
|---|---|---|---|
| Year 1 | 0.9091 | 727,272.73 | |
| Year 2 | 0.8264 | 743,801.65 | |
| Year 3 | 0.7513 | 751,314.80 | |
| Year 4 | 0.6830 | 717,164.13 | |
| Year 5 | 0.6209 | 683,013.46 | |
| Terminal | 14,025,000.00 | 0.6209 | 8,708,421.56 |
Value in use
AED 12,330,988.32
Carrying amount
AED 5,000,000.00
Headroom
AED 7,330,988.32
Value in use exceeds carrying amount — no impairment required.
Disclaimer
Illustrative figures computed in your browser. Nothing is uploaded, stored or sent anywhere. Not accounting or tax advice; verify treatment with your advisor.