Problem
In some situations, the carrying amounts of assets on the books of a firm may grossly overstate their "true" value. In such a situation, impairments may be necessary. Impairments can be considered as "extra" depreciation. Discuss the IFRS rules on impairment testing, how to calculate the recoverable amount, and how to calculate the magnitude of an impairment. Distinguish between depreciation and impairment testing for tangible and intangible assets.