Jack Sharville considers the issues connected with property impairment under IFRS 16 and its impact on tax deductions
As the lockdown changes the way people work, rest and play, the value of real property must also be reconsidered. Most commercial buildings, from shops to warehouses, to bars and restaurants, have been impacted in one way or another. IAS 36 Impairment of Assets requires that companies conduct impairment tests on those properties. Clearly, where the value of a property has been severely impacted, this will in turn also impact the business’s income statements and balance sheet. But why should the tax professional take note?