Category: Public Sector Accounting

Impairment of Non-Cash-Generating Assets

Article originally published in the Israeli Professional Journal Roeh Haheshbon

February 2005

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Impairment of Non-Cash-Generating Assets

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In its July 2004 meeting, the International Public Sector Accounting Standards Board (IPSASB) of IFAC, approved the publication of an International Public Sector Accounting Standard (IPSAS) No. 21 "Impairment of Non-Cash- Generating Assets" (the standard). Terms and terminology used in the standard reminds the reader the revised International Accounting Standard (IAS) No. 36, "Impairment of Assets". However, the uniqueness of the standard steams from its scope: Applies only to assets that do not generate cash flows. IPSAS 21 explicitly states that cash generating assets or assets which are part of cash generating groups will be tested for impairment using private sector accounting (IAS 36). In the near future, a public sector standard for testing impairment of cash generating asset, will be published by the IPSASB.