WRITTEN ASSIGNMENT

Written assignment on Foster's

Why an impairment test is considered necessary?

It provides procedures for the entity to ensure that their assets do not exceed their recoverable amounts. Recoverable amount assets are less than its book value more, if the amount exceeds the asset recovery through the use or sale. If this is the case, was described as impairment and physical requirements of the standard impairment loss are recognized. (Ernst & Young, 2001)

Let us continue to define the testing process prior to several aspects:

* fair value less costs to sell ("fair value") is an asset as far as to exchange or a liability settled between knowledgeable, willing parties, in a fair amount of the transaction.

* Use the value (of "déjà vu") is the discounted value of future cash flows expected from the assets.

* the asset's carrying amount is recognized as an asset after deducting accumulated depreciation and accumulated impairment losses amount.

Therefore, the purpose of impairment testing program should be like this:

1. Determine the assets test.

2. Estimated fair value of the assets and / or Vulnerable. If the first is estimated at more than the greater of the asset's carrying value, then the other did not estimate the value. However, if the first estimated at less than its book value, other values need to be estimated.

3. If anyone or VU less than fair value the carrying amount of assets, then there is no obstacle.

4. If the ratio of the two antibodies and Vivendi Universal assets, an impairment of the carrying value as fair value or book value of the VU (whichever is higher), is small.

5. The asset is reduced to its new value.

As economic turmoil, it is important; the company began to consider the impairment early, because many people will be affected. Start early, especially for those who have never experienced this process are the company's important. Additional time will be the key to understanding the value drivers, and the establishment of appropriate assistance. (Anantharaman, 2007)

Which assets are subject to impairment testing?

* Inventory can be impaired.

* Assets arising from construction contracts can also be impaired.

* Deferred tax assets can also be impaired.

* Assets arising from employee benefits can be impaired.

* You can impairment of financial assets.

* Investment properties are stated at fair value through impairment testing.

* Agricultural assets at fair value can be tested for impairment.

* Insurance contracts can be tested for impairment of assets.

* Non-current assets held for sale by impairment testing.

Further describing, following assets can be tested through impairment.

* Land

* Buildings

* Machinery and equipment

* Investment property carried at cost

* Intangible assets

* Goodwill

* Investments in subsidiaries, associates, and joint ventures carried at cost

* Assets carried at revalued amounts. (Anantharaman, 2007)

What were the external influences that drove Fosters to undertake an impairment test?

There were rumors in the market regarding Foster that it had suffered huge losses and that its rival brewer SAB Miller was tilting towards its beer ...