Question for anyone that has dealt with this issue:
As at its transition date, a company will need to review its assets (CGUs) for indicators of impairment. Some of the indicators suggested in IAS 36 refer to “the period”. Some indicators are current – as of that date.
I have assumed that “the period” refers to the previous annual period. This assumption is based on” (a) the fact that for a regular year, the period would refer to the previous annual period, and (b) IFRS 1 indicates that the same estimates used under the previous GAAP should be used when reviewing for indicators of impairment, and these previous GAAP estimates would be been based on a previous period.
Assume a calendar year-end company had indicators of impairment under Canadian GAAP at Q3 2009, resulting from certain events during Q3 2009. They performed the Canadian GAAP testing and found no impairment using undiscounted cash flows.
On adoption of IFRS, this company would still need to review for events over the full 2009 year that might indicate impairment – and therefore be required to test for impairment under IFRS (since the indicators in Q3 would be picked up). As opposed to only looking at current information and events since Q3 2009.