The AASB in 2004 published a 106-page accounting standard relating to impairment of assets. AASB 136 is applicable to annual reports starting from 1 January 2005. The main feature of AASB 136 is that it will replace the accounting standard AASB 1010 applied for the recoverable amount of non-current assets (Kabir and Rahman 2016). . In the case of profit, entities adopting ASB 136 will concurrently comply with IAS 136. This standard is applicable to all entities that are required to prepare financial statements under the Companies Act. It should be noted that this standard is applicable to most assets except for some assets such as financial obligations, inventories, deferred tax assets and others. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay Paragraph 6 of the standard defines impairment as the amount by which the recoverable amount is less than the carrying amount of the assets. The recoverable amount is determined by comparing the value in use with the fair value less sales costs. Paragraph 9 requires an entity to assess at the end of the reporting period whether there is an indication of impairment of the assets. If such an indication exists then the entity will be required to determine the recoverable amount of the assets (Sun and Zhang 2017). However, it is specified that pursuant to par. 10 regardless of the indication, the impairment test must be carried out for intangible assets with an indefinite useful life and for the goodwill acquired in the business combination. Paragraph 12 requires that an entity must consider at least the following indications to assess whether the asset has been impaired: there is evidence of physical damage to the assets; significant changes have occurred that adversely affect the entity; it is foreseen in the internal rules to indicate that there is the possibility that the economic performance of the activities will be negatively influenced; there has been a significant decline in the market value of the assets; significant changes have occurred in the political, social and economic context of the entity; there has been an increase in the market rate of return or market interest rate during the financial year; Paragraph 59 of the standard requires an entity to require the carrying amount of assets to be reduced to their recoverable amount if the recoverable amount is lower. The reduction in the amount is treated as a loss of value. In paragraph 60 it is stated that the impairment loss should be immediately recognized in the income statement (Gordon and Hsu 2016). In the case of assets that have an impairment loss greater than the carrying amount of the assets, then the entity is required to recognize the liability under paragraph 62. Note that, under paragraph 63, after the recognition of the loss for reduction in value, then the depreciation charge is adjusted so that the revised book value can be allocated to the remaining useful life of the assets. Paragraphs 110 to 116 of IASB 136 provide the requirement for the reversal of impairment. An entity is expected to assess at the balance sheet date whether the impairment loss recognized in the previous period has reduced or no longer exists. If there is an indication that such a possibility exists then the entity will assess the recoverable amount of the assets (Peterson 2015). Paragraph 114 provides that the impairment loss recognized in the previous period for an asset other than goodwill should be reversed if there is an indication that there has been a change in the recoverable amount of the asset after the.