Investments, Intangibles & Impairment

Three related topics about assets whose value is not settled by a market price on the day you look at them. Investments come first. Under IFRS 9 the classification decides everything that follows: a holding bought to trade is measured at fair value with gains going straight to profit or loss; a bond held to collect principal and interest sits at amortised cost; and a non-trading equity holding can be tagged, irrevocably, to fair value through other comprehensive income — where the gains never reach profit or loss at all, even when the investment is sold. Holdings large enough to confer significant influence leave fair value behind entirely for the equity method. Intangibles turn on a single split: finite life or indefinite. A finite-life intangible is amortised over that life. An indefinite-life one is never amortised, which is precisely why it has to be tested for impairment every year — and that leads into the last section. Impairment closes the chapter. Compare carrying amount with recoverable amount, write the difference off, and know the two harder cases: when an impairment may be reversed, and how a loss is allocated across a cash-generating unit that carries goodwill.