Assets that do not generate independent cash flows, and goodwill, are tested for impairment at cash-generating unit level. How units are defined directly affects whether an impairment arises.
Source: TMS 36
Related terms
Impairment of assetsRecognising as a loss the excess of an asset's carrying amount over its recoverable amount.GoodwillThe excess of the consideration paid in a business combination over the fair value of the acquired business's identifiable net assets.Recoverable amountThe higher of an asset's or cash-generating unit's fair value less costs of disposal and its value in use.Accounting estimatesThe determination by management judgement of amounts that cannot be measured precisely, such as provisions, useful lives, expected credit losses and fair values.Accounting policiesThe specific principles, bases, conventions, rules and practices an entity applies in preparing its financial statements.Accrual basis of accountingThe principle of recording transactions as income, expenses, assets and liabilities in the period in which they occur, rather than when cash is received or paid.
Last updated: November 8, 2026 · This definition is for general information only.