Impairment Testing (IAS 36): Step-by-Step CGU Identification and WACC Calculation for Distressed Tech Assets (IFRS in Practice)

Impairment Testing (IAS 36). Step By Step CGU Identification and WACC Calculation for Distressed Tech Assets is a technical and practice-led guide for finance professionals, valuation specialists, auditors, CFOs, accounting students, M&A teams, restructuring advisers, and corporate reporting teams dealing with software businesses, digital platforms, intangible assets, and weakened technology portfolios.The book addresses one of the hardest areas in financial reporting and valuation. How should an entity test impaired software, digital platforms, acquired technology, customer relationships, data-linked assets, and goodwill when cash flows are unstable, product relevance is fading, monetisation is under pressure, and the commercial model no longer supports the optimism built into prior carrying amounts?Focus remains on IAS 36 in real distressed technology settings. Attention is given to CGU identification, stand-alone versus interdependent cash inflows, allocation of shared codebases and support functions, goodwill testing, value in use, fair value less costs of disposal, WACC design, cost of equity, cost of debt, country risk, size risk, asset-specific risk, and the allocation of impairment losses across intangible assets inside the CGU.Readers are taken through the full impairment path. Indicators of impairment are identified. Distressed technology assets are classified. The Cash-Generating Unit is defined with a practical method suited to enterprise software, SaaS, data platforms, fintech tools, digital marketplaces, and software-rich acquisitions. Value in use models are then built step by step, with close attention to forecast design, terminal value, scenario structure, sensitivity testing, and common valuation errors. A full worked case shows how the accounting logic moves from trigger event to reporting outcome.Particular weight is given to WACC calculation for distressed tech assets. The text explains how to derive the testing discount rate through risk-free rate, beta selection, cost of equity, cost of debt, capital structure normalisation, country exposure, size effects, and asset-specific factors. It also explains how to avoid double counting risk between the cash flows and the discount rate, one of the most frequent weaknesses in IAS 36 models.This book is written for readers who need more than a generic overview of impairment. It is built for those dealing with difficult judgement under pressure: weakened SaaS revenue, delayed migrations, software decay, legal restrictions on data use, falling renewal rates, failed integration after acquisition, and digital assets whose market value has moved far below historic carrying amounts.If your work involves IAS 36, impairment testing, CGU definition, goodwill impairment, intangible assets, valuation of software businesses, or WACC design for distressed technology portfolios, this book offers a direct and technically rigorous path through the issue. Read more