Financial Reporting · Ind AS 36 Impairment of Assets

Ind AS 36 Disclosures and Differences from IAS 36

Updated 5 October 2026 · Fact-checked

Ind AS 36 disclosures tell users where impairment arose, how much, and why. You disclose losses and reversals by class and segment, the events behind them, the recoverable amount and its basis, and key assumptions for each CGU with significant goodwill or indefinite-life intangibles. Core rules match IAS 36; differences are terminology and consequential carve-outs, stated with reasons.

Understand Disclosures and Differences from IAS 36

Impairment numbers alone do not help a reader. A loss of ₹50 crore means little unless you know which asset, which business, and what changed. Disclosure fills that gap. Ind AS 36 asks for facts, the basis of the recoverable amount, and the assumptions behind it.

The disclosures work in layers. First, for each class of assets, you disclose impairment losses and reversals recognised in profit or loss, and the line items where they sit. Revalued assets add the amounts taken to other comprehensive income. If the entity reports segments under Ind AS 108, you also give these amounts by reportable segment.

Second, for each individual material impairment loss or reversal on an asset (including goodwill) or a cash-generating unit (CGU), you give detail. This covers the events and circumstances that led to it, the amount, and the nature of the asset. For a CGU, you also describe the unit (for example, a product line, plant or business operation), give the amounts of loss or reversal by class of assets and by reportable segment, and state any change in the aggregation of assets since the previous estimate of recoverable amount, with the reasons. You disclose the recoverable amount of the asset or CGU and state whether it is fair value less costs of disposal or value in use. If it is fair value less costs of disposal, you give the level of the fair value hierarchy and the valuation technique. If a present value technique is used, you also give the discount rate(s) used in the current and previous measurement. If it is value in use, you give the discount rate(s) used in the current and any earlier estimate.

Third, each CGU with significant goodwill or indefinite-life intangibles, in relation to the entity's total carrying amount of such items, needs more. You disclose the carrying amount of goodwill allocated to the unit, the basis of recoverable amount, and the key assumptions. You also state the period of cash flow projections and the growth rate beyond that period. Where value in use is used, you give the discount rate. Where fair value less costs of disposal is measured using a present value technique, the discount rate must also be disclosed. If a reasonably possible change in a key assumption would make carrying amount exceed recoverable amount, you give a sensitivity disclosure.

On differences, Ind AS 36 follows IAS 36 closely, and the core rules are the same. Both define recoverable amount as the higher of fair value less costs of disposal and value in use. Both require a pre-tax discount rate that reflects current market assessments. Both bar reversal of a goodwill impairment loss. So do not claim a difference on these points.

The differences you can safely state are these:
- Terminology and references: Ind AS 36 uses Ind AS terms, such as Statement of Profit and Loss, and refers to Ind AS standards, including Ind AS 113 for fair value and Ind AS 108 for segments. IAS 36 uses IFRS terms and refers to IFRS 13 and IFRS 8. Reason: Ind AS are the standards notified in India.
- Investment property: Ind AS 40 permits only the cost model, while IAS 40 also permits the fair value model. So the IAS 36 scope exclusion for investment property carried at fair value has no work to do for an Ind AS company. Cost-model investment property is tested under Ind AS 36. Reason: the Ind AS 40 carve-out.
- Bargain purchase and goodwill: IFRS 3 takes a bargain purchase gain to profit or loss. Ind AS 103 takes it to other comprehensive income and accumulates it in equity as capital reserve. This is an Ind AS 103 carve-out, not Ind AS 36 text, but it matters in goodwill answers.

This page lists only differences that can be verified from the standards. It does not claim a complete paragraph-level list. For that, read the comparison with IAS 36 given with the standard in the ICAI material. State each difference with the Ind AS position, the IAS position and the reason.

Key rules to remember

Recoverable amount: Recoverable amount = higher of (fair value less costs of disposal, value in use); Disclose the recoverable amount and which basis was used. The basis drives the extra detail required.
Impairment loss: Impairment loss = carrying amount − recoverable amount, if carrying amount is higher; Loss and reversals are disclosed by class of assets and by reportable segment.
Disclosure for a material loss: Events and circumstances + amount + nature of asset + recoverable amount and its basis. For a CGU, add: description of the CGU + loss by class of assets and by segment + change in aggregation of assets and reasons; If fair value less costs of disposal: give hierarchy level and technique, and the discount rate if a present value technique is used. If value in use: give the discount rate.
Goodwill or indefinite-life CGU disclosure: Carrying amount allocated + recoverable amount basis + key assumptions + projection period + growth rate + discount rate (value in use, or fair value less costs of disposal measured by a present value technique); Applies to each CGU with significant goodwill or indefinite-life intangibles relative to the entity's total. Add sensitivity if a reasonably possible change in a key assumption would cause impairment.
Reversal limit: Reversed carrying amount ≤ carrying amount had no impairment been recognised (net of depreciation); Goodwill impairment is never reversed. Useful to link with the disclosure of reversals.

How to solve Disclosures and Differences from IAS 36 questions

Use this method for any question asking for disclosures or differences from IAS 36, with or without a case.

1Read the case and list the assets, CGUs, goodwill and segments mentioned.
2Decide what the question asks: a disclosure list, a computation plus disclosure, or a comparison with IAS 36.
3Split the disclosures into layers: by class and segment, individual material loss or reversal, and CGUs with significant goodwill or indefinite-life intangibles.
4Match case facts to each layer, for example the basis of recoverable amount and the discount rate given.
5Write each point as provision, then fact, then conclusion. Use the case numbers where available.
6For differences, state the Ind AS 36 position, the IAS 36 position and the reason, then link to the case.
7Close with a one-line conclusion on what the entity must disclose or how the treatment differs.

Quickest way: Three-layer disclosure checklist

When to use it: Use when time is short and the question asks you to list disclosures for a given impairment scenario.

Write layer 1: loss and reversal by class and by segment, with line items in the Statement of Profit and Loss and OCI.
Write layer 2: for each material loss or reversal, the events, amount, asset or CGU, the recoverable amount and its basis with hierarchy level, technique and discount rate where applicable. For a CGU, add its description, loss by class and segment, and any change in aggregation of assets with reasons.
Write layer 3: for each CGU with significant goodwill or indefinite-life intangibles, carrying amount, key assumptions, projection period, growth rate, discount rate and sensitivity.
Add one line on any difference from IAS 36 only if the question asks for it.

Common mistakes in Disclosures and Differences from IAS 36

Listing only the loss amount and ignoring the reason for it.
Students treat disclosure as a number, not a narrative.
Fix: Always include the events and circumstances that caused the loss or reversal, plus the nature of the asset or CGU.
Saying the discount rate is never needed when recoverable amount is fair value less costs of disposal.
Students mix the two bases and remember only one rule for each.
Fix: Fair value less costs of disposal needs hierarchy level and valuation technique. If it is measured using a present value technique, give the discount rate too. Value in use always needs the discount rate.
Forgetting segment-wise disclosure.
The segment link to Ind AS 108 is easy to miss.
Fix: If the entity reports segment information, give losses and reversals for each reportable segment.
Treating goodwill impairment as reversible and disclosing a reversal.
Students apply the general reversal rule to all assets.
Fix: Impairment of goodwill is never reversed. Disclose only reversals for other assets.
Writing a long list of differences from IAS 36 from memory without checking the case.
Students over-memorise lists and write items that do not apply.
Fix: State only differences relevant to the facts, each with the Ind AS position, the IAS position and the reason.
Omitting sensitivity disclosure for goodwill CGUs.
It sits at the end of the paragraph and gets skipped.
Fix: Check whether a reasonably possible change in a key assumption would make carrying amount exceed recoverable amount. If so, disclose it.

Worked examples

Example 1

Sunrise Ltd, an Ind AS company, has two reportable segments. In the year, a plant in the Textiles segment was impaired by ₹4 crore after a ban on its main product. Recoverable amount was based on value in use. Sunrise also tested a CGU in the Chemicals segment holding goodwill of ₹12 crore, which is significant relative to the total goodwill and indefinite-life intangibles of the entity, and found no impairment. Which disclosures does Sunrise need?

Show the solution

Layer 1: Disclose the ₹4 crore loss for the class plant and machinery, the line item of the Statement of Profit and Loss where it is included, and the amount for the Textiles reportable segment.
Layer 2: The loss is material, so disclose the events (the ban on the main product), the amount (₹4 crore), the nature of the asset or CGU, and the recoverable amount.
If the plant is assessed as part of a CGU, also describe the CGU, give the loss by class of assets and by segment, and state any change in aggregation of assets since the previous estimate, with reasons.
Because recoverable amount is value in use, state this basis and disclose the discount rate used now and in any earlier estimate.
Layer 3: The Chemicals CGU holds significant goodwill, so disclose the goodwill of ₹12 crore allocated to it, the basis of recoverable amount, key assumptions, projection period, growth rate and discount rate.
Add sensitivity disclosure only if a reasonably possible change in a key assumption would make carrying amount exceed recoverable amount.

Answer: Sunrise must disclose the ₹4 crore loss by class and by Textiles segment, the cause, the recoverable amount and its value in use basis with discount rate, and, for the Chemicals CGU with significant goodwill, the assumptions, projection period, growth rate and discount rate. A sensitivity disclosure applies only if a reasonably possible change would cause impairment.

Example 2

Meera Ltd's CGU Alpha was impaired earlier. This year its recoverable amount rose. The CGU has goodwill. The board asks whether the goodwill impairment can be reversed and what must be disclosed. Also, a junior says Ind AS 36 differs from IAS 36 on this reversal rule. Advise.

Show the solution

Provision: Impairment loss on goodwill is not reversed in a later period, under both Ind AS 36 and IAS 36.
Fact: Alpha's recoverable amount has risen, but the impairment on goodwill stays.
The loss on other assets of the CGU may be reversed, but only up to the carrying amount had no impairment been recognised, net of depreciation.
Disclosure: Give the reversals by class and segment, and for a material reversal, the events leading to it, the amount, the nature of the asset, and the recoverable amount basis.
Difference: The junior is wrong. Both standards bar reversal of goodwill impairment, so this is not a difference.

Answer: Goodwill impairment cannot be reversed. Reversals on other assets of the CGU are limited and must be disclosed by class, segment and, if material, individually. There is no difference from IAS 36 on the goodwill rule.

Exam tips

Structure disclosure answers in three layers. It makes it easy to earn marks for each point.
In MCQs, check the basis of recoverable amount first. It decides whether the answer involves discount rate or hierarchy level.
Never write a difference from IAS 36 unless you are sure. A wrong carve-out costs more than leaving it out.
Use case figures inside your disclosure points, for example the goodwill amount, so the answer reads as applied.

Practice questions from Ind AS 36 Impairment of Assets

Disclosures and Differences from IAS 36: frequently asked questions

What are the main disclosure requirements of Ind AS 36?

You disclose losses and reversals by class of assets and by reportable segment, with details for each material loss or reversal, including the recoverable amount. For each CGU with significant goodwill or indefinite-life intangibles, you give key assumptions, discount rate, growth rate and sensitivity where relevant.

Is Ind AS 36 very different from IAS 36?

No. The core rules are the same: recoverable amount, a pre-tax discount rate, and no reversal of goodwill impairment. The differences you can state are Ind AS terminology and references (Ind AS 113, Ind AS 108), the Ind AS 40 cost-model-only position for investment property, and the Ind AS 103 bargain purchase gain going to capital reserve. For any other paragraph-level difference, check the comparison with IAS 36 in the ICAI material.

Do I need to disclose the discount rate every time?

No, but it is needed more often than students think. You disclose it when recoverable amount is based on value in use. You also disclose it under fair value less costs of disposal when a present value technique is used. For fair value less costs of disposal you must in addition give the hierarchy level and valuation technique.

Is sensitivity disclosure always required?

No. It is needed for a CGU with significant goodwill or indefinite-life intangibles when a reasonably possible change in a key assumption would make carrying amount exceed recoverable amount.