Can we amortize the impairment reserve over the remaining useful life of the asset?
We have a requirement from client from France to amortize impairment reserve over the remaining useful life of the asset without changing the original depreciation amount of the asset.
Asset: 100023, Cost: 60000 EUR, Life: 60 months, Method: STL
Assuming straight line method for depreciation for this example, monthly depreciation is 1000 EUR (60000/60).
At 37th month, it is decided to impair the asset to 12000 value. NBV before the impairment = 60000 – 36*1000 = 24000.
The accounting treatment requirement as per French GAAP as mentioned by the client is as below:
Perion Pn denotes n-th period (like P1 denoted 1st period or the period of addition).