Impairment of Assets and Corporation Risk

Keywords: risk, impairment of assets, impairment allowance, value in use


Importance. A large number of external and internal factors affect the economic activity of corporations. In particular, these factors give rise to risks that directly affect the valuation of assets in accounting and financial reporting.
Objectives. The article explores the risks of loss of value of non-current and current assets, as well as the reasons for their occurrence, leading to a change in the corporation's equity.
Methods. Research is based on methods of logic, analogy and statistical analysis, as well as methods for assessing the risk of loss in the value of non-current and current assets that have financial implications and affect the assessment and formation of accounting (financial) statements.
Results. It is spoken in detail about recognition and adjustment of the value of assets subject to impairment, features of determining the amount of the impairment allowance for financial assets, inventories, and doubtful receivables. The author suggests introducing a methodology for testing long-term assets (fixed assets, intangible assets, other) for impairment in accordance with IAS 36 “Impairment of Assets” in the practical activities of domestic corporations. The study showed that timely risk assessment of impairment loss provides the identification of the causes of risk, allows you to assess losses and make management decisions. Experiencing possible difficulties in eliminating the influence of external risk factors, the corporation is able to influence internal factors by monitoring the facts of economic life and maintaining accounting records.
Conclusions and Relevance. The formation of the amount of the impairment allowance and the testing of corporate assets for impairment ensures the reliability of the information in the financial statements. The adoption of management decisions in identifying risks involves the creation of a control environment by the corporation, the organization of internal control procedures and regular informing of personnel about the results. The development of corporate accounting and reporting standards that establish the powers of corporation units and personnel in identifying and analyzing risks will make it possible to organize risk information. Summarizing information about risks in internal reporting formats will allow disclosing indicators and explanations about risks in public accounting (financial) statements


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Author Biography

Natalia G. Sapozhnikova, Voronezh State University

Dr. Sci. (Econ.), Prof., Head of Accounting Department


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How to Cite
Sapozhnikova, N. G. (2020). Impairment of Assets and Corporation Risk. Proceedings of Voronezh State University. Series: Economics and Management, (2), 105-115.
Accounting, statistics