Impairment of long-lived assets, what are they?

Impairment of long-lived assets

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What are long-lived assets and what are they?

They refer to those elements that are maintained within the entity and are essential to carry out operations, with the expectation of generating economic benefits in the future or, in the case of being acquired for that purpose, their disposal is decided, these elements They can be classified as “operating assets” and “corporate assets.”


These assets have the characteristic of providing economic benefits to the company over a long period. 


Some common examples of long-lived assets include:


Properties, plant and equipment: They include land, buildings, machinery, equipment and other physical assets used in the production of goods or services.


Long-term investments: Interests in stocks, bonds, or other financial investments that are held with the intention of holding them for a significant period of time.


Intangible assets: Such as patents, trademarks, copyrights and other non-physical assets that have lasting value and contribute to revenue generation over time.


These assets are usually an important part of a company's financial structure and are recorded on the balance sheet, proper management of long-lived assets is essential for the long-term planning and financial health of an organization.


Some important concepts of long-lived assets:

Corporate assets: They are long-lived assets that, although they do not generate cash flows themselves, play an essential role in the entity's operations. Examples of these assets include corporate buildings, research and development centers, and central computing equipment. These assets They may or may not be associated with a legal entity other than corporate units, but they are integral components of the same economic entity.


Intangible assets with indefinite life: As established in Bulletin C-8 on Intangible Assets, intangible assets are considered those that do not have legal, regulatory, contractual, competitive, economic, or other factors that limit their useful life. It is important to note that the term “indefinite” It does not imply that the useful life is infinite.


Operating assets: They refer to long-lived assets that directly produce cash flows.


Disposal cost: These are the costs and expenses specifically associated with the disposition of the asset, not including income tax or employee profit sharing.


Deterioration: Refers to the situation in which the future economic benefits, that is, the recovery value, of “long-lived assets” in use or disposal, are less than their “net book value”, an example of this It would be an asset that has experienced an accident or damage, such as a car that has been in a collision.

What is long-lived asset impairment in fixed assets?

The objective of this NIF is to define the specific criteria to value, present and disclose the long-lived assets that have been decided to be disposed of and whose value has deteriorated.

NIF C-15 Long-Term Impairment of Value and Its Disposition


The objective of this NIF is to define the specific criteria to value, present and disclose the long-lived assets that have been decided to be disposed of and whose value has deteriorated.

Presentation and valuation standards

  • Long-lived assets


The loss due to impairment in the value of long-lived assets in use, as well as its reversal, must be reflected in the income statement in the cost and expense lines where the depreciation or amortization related to said assets is recognized. This is valid unless it is a loss or reversal caused by a permanent investment in associates; In such case, said loss must be presented in the category called “share in the results of unconsolidated or associated subsidiaries.”


When signs of deterioration, there are assets with indefinite lives or impairment losses have been recorded, the pertinent situations must be disclosed, as applicable, such as:


  • In the event that changes occur in the assumptions used, it is necessary to disclose this fact along with the reasons underlying it.
  • The events and conditions that justifiably caused the evaluation, or failing that, the loss due to impairment or its reversal.
  • The impact of the impairment correction or its reversal for each of the cash-generating units and their respective categories of assets that constitute them.
  • Whether the current net book value is made up of its net selling price or its value in use.
  • The standards used to calculate the net selling price (for example, by reference to the active market used).
  • The appropriate discount rates used to calculate the use value.
  • The consequences on the impairment loss caused by changes in the grouping of assets that constitute the cash-generating unit.
  • If segmented information is disclosed, impairment losses and their reversals applied to each of the segments must be presented.

Long-lived assets whose disposition has been decided

The loss for impairment of assets long-lived assets intended for sale, as well as their resulting increases or reductions, must be reflected in the income statement in the cost or expense categories where the associated depreciation or amortization of said assets is recorded.


Long-lived assets intended for sale and related liabilities must be presented in the corresponding items of current assets and current liabilities, respectively, without offsetting between them.

The following situations must be disclosed:


  1. Detailed explanation of long-lived assets and associated liabilities, including their amounts and the situations that led to the decision to put them up for sale, along with the planned date for their sale.

  2. The standards used to calculate the net selling price, such as by reference to the market used.

  3. The total amount of accumulated impairment loss on long-lived assets.

  4. Detailed information and an estimate of the amount of liabilities associated with the disposition for sale, which do not yet meet the requirements for inclusion in the financial statement figures.

  5. Reasons, amounts and consequences on the results of assets designated for sale that were chosen to continue using, together with an explanation of their valuation in accordance with paragraph 98.

  6. If segmented information is presented, the impairment losses and their reversals applied to each of the segments must be shown.

Asset Exchange Abandonment

The profit or loss resulting from the abandonment or exchange for other assets, if part of the interruption of an operation, must be shown and disclosed.

Discontinuation of an operation

During the period in which an operation is discontinued, the indicated impairment loss and its reversal, as well as the gain or loss, must be displayed in the income statement as a specific item (on a single line) after continuing operations. , net of ISR and PTU.


The assets and liabilities associated with the interruption of an operation must be shown in the balance sheet in separate categories of assets and liabilities, in a single line, duly classified as current and non-current, without offsetting between them, therefore, the balance sheets from previous periods that are presented for comparative purposes must be adjusted in their structure.

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