IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT OF PUBLIC INTEREST ENTITIES

Abstract

Introduction. The current activities of enterprises are being severely impacted by the shifts in the economic and legal landscape stemming from the military aggression of the Russian Federation. Numerous companies have temporarily lost oversight of their assets and operations, leading to uncertainties regarding going concern. The potential for realizing economic benefits from remaining assets hinges on post-occupation conditions, which are difficult to forecast at this time. Stakeholders have expressed skepticism, as there is a lack of comprehensive and transparent impairment assessment procedures. Furthermore, the financial statements do not reflect impairments of property, plant, and equipment, primarily because the indicators of impairment have been fully triggered during the ongoing full-scale invasion. Purpose. The article is aimed at studying the procedure for impairment of property, plant and equipment and disclosure of this information in the financial statements of public interest entities, as dictated by IAS 36. Methods. A variety of general scientific methods were used, including the modeling method to create a process for testing impairment of property, plant, and equipment based on their value in use; statistical sampling and grouping methods to establish a sample of public interest entities for analyzing impairment disclosure in financial statements; and logical generalization methods for drawing conclusions from the research findings. Results. The study considers both external and internal indicators of impairment for property, plant, and equipment. A detailed testing process for impairment of property, plant and equipment with the application of value in use EBITDA and WACC is develops. The study presents a comprehensive list of the information regarding impairment that should be disclosed in financial statements, as dictated by IAS 36. Conclusion. The findings indicate that public interest entities often disclosure incomplete information about impairment of property, plant, and equipment in their financial statements, which undermines stakeholder trust.