An Evaluation of Asset Impairments by Australian Firms and Whether They Were Impacted by AASB 136

30 Pages Posted: 3 Mar 2016

See all articles by David Bond

David Bond

University of Technology Sydney (UTS)

Brett J. Govendir

University of Technology Sydney (UTS); Financial Research Network (FIRN)

Peter Alfred Wells

University of Technology Sydney, Accounting Discipline Group ; Financial Research Network (FIRN)

Date Written: March 2016

Abstract

This study evaluates how managers of Australian firms are implementing the regulation requiring the impairment of assets and whether asset impairments can be categorised as non‐discretionary. We find some evidence that realised asset impairments are reflective of regulatory requirements. However, for the majority of firms exhibiting at least one externally observable indicator of impairment, they are not recognising asset impairments, and recognition is often delayed. Accordingly, while realised asset impairments might be categorised non‐discretionary, the timing of their recognition appears highly discretionary. There is some evidence that the realisation of asset impairments increased subsequent to transition to IFRS; however, the majority of firms with indicators of impairment are still not recognising asset impairments.

Keywords: Impairment of assets, Disclosure, AASB 136

Suggested Citation

Bond, David and Govendir, Brett J. and Wells, Peter Alfred, An Evaluation of Asset Impairments by Australian Firms and Whether They Were Impacted by AASB 136 (March 2016). Accounting & Finance, Vol. 56, Issue 1, pp. 259-288, 2016, Available at SSRN: https://ssrn.com/abstract=2741354 or http://dx.doi.org/10.1111/acfi.12194

David Bond (Contact Author)

University of Technology Sydney (UTS) ( email )

15 Broadway, Ultimo
PO Box 123
Sydney, NSW 2007
Australia

Brett J. Govendir

University of Technology Sydney (UTS) ( email )

15 Broadway, Ultimo
PO Box 123
Sydney, NSW 2007
Australia
+61 2 95143582 (Phone)

HOME PAGE: http://www.business.uts.edu.au/

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Peter Alfred Wells

University of Technology Sydney, Accounting Discipline Group ( email )

P.O. Box 123
Broadway NSW 2007
Australia
+61 (02) 9514 3628 / 3629 (Phone)
+61 (02) 9514 5515 (Fax)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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