Recoverable Amount
Accounting glossary · Understand, connect, apply
Under IAS 36, recoverable amount is the higher of an asset’s value in use and its fair value less costs of disposal. It is the benchmark used in the impairment test.
Example
A machine has value in use of 36,000 and fair value less disposal costs of 41,000. Its recoverable amount is 41,000.
Remember the difference
An entity can sometimes establish that an asset is recoverable by calculating only one measure. If that measure exceeds carrying amount, the second is unnecessary for that conclusion.
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Published 9 November 2026. Prepared with AI assistance. Examples are fictional and simplified for learning.
Examples are simplified for learning. Where a term depends on US law, IFRS, US GAAP or a historical rule, check the context explained above and the requirements relevant to your course.
Study references: OpenStax financial accounting and managerial accounting. For reporting requirements, consult the applicable IFRS Standards or FASB guidance. US tax terms should be checked against the relevant tax-year IRS instructions.
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