Accounting Standards 1-29 - Seth & Associates

4. The following terms are used in this Statement with the meanings
specified:
Recoverable amount is the higher of an asset’s net selling price and its
value in use.
Value in use is the present value of estimated future cash flows expected
to arise from the continuing use of an asset and from its disposal at the
end of its useful life.
Net selling price is the amount obtainable from the sale of an asset in an
arm’s length transaction between knowledgeable, willing parties, less the
costs of disposal.
Costs of disposal are incremental costs directly attributable to the
disposal of an asset, excluding finance costs and income tax expense.
An impairment loss is the amount by which the carrying amount of an
asset exceeds its recoverable amount.
Carrying amount is the amount at which an asset is recognised in the
balance sheet after deducting any accumulated depreciation
(amortisation) and accumulated impairment losses thereon.
Depreciation (Amortisation) is a systematic allocation of the depreciable
amount of an asset over its useful life. 4
Depreciable amount is the cost of an asset, or other amount substituted
for cost in the financial statements, less its residual value.
Useful life is either:
a. the period of time over which an asset is expected to be used by
the enterprise; or
b. the number of production or similar units expected to be obtained
from the asset by the enterprise.
A cash generating unit is the smallest identifiable group of assets that
generates cash inflows from continuing use that are largely independent
of the cash inflows from other assets or groups of assets.
Corporate assets are assets other than goodwill that contribute to the
future cash flows of both the cash generating unit under review and other
cash generating units.
An active market is a market where all the following conditions exist :
a. the items traded within the market are homogeneous;
b. willing buyers and sellers can normally be found at any time; and