Disclosure of Tangible Assets at Recoverable Amount as Fair Value in Annual Financial Statements

Author:PhD Student Monica JULEAN, PhD Student Elena IORDACHE

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Keywords:the weighted average cost of equity, value in use, indicators, impairment

Abstract:
Current economic conditions of recession will lead many entities to assess by the end of this financial year their tangible assets at a lower value than the accounting value.\r\n At the annual inventory required by law, fixed assets are valued at the lower value of the book value and recoverable amount. \r\nThe recoverable amount, in its turn, is the higher of fair value less costs of sales and the use value of the asset. \r\nDetermining the use value is a complex process that requires cash flow estimates for a time and choose a model to derive optimal update rate. \r\nThe difference between the recoverable amount and the amount of use is the loss of depreciation for the asset or, in this case, of cash-generating unit.\r\n

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