Accounting Measurement of Long-Lived Assets:A Case Study of Impairment Practices


  • Irina Kuzmina Riga International School of Economics and Business Administration
  • Ieva Kozlovska BA School of Business and Finance; Deloitte Latvia


long-lived assets, measurement, impairment, information disclosure


In accounting practices long-lived assets evaluation based on the current market situation is one of the most complex issues. For companies making large-scale investments in long-lived assets this question becomes vitally important because impairments of tangible assets and goodwill are significantly associated with future cash flows. The procedure for the evaluation of long-lived assets is regulated by the national accounting laws and international financial reporting standards, in particular IAS 36 "Impairment of Assets". However, many questions related to the practical application remain unresolved and lead to different interpretations and subjective judgments. Therefore, in some cases shareholders' expectations of future economic benefits from the use of long-lived assets are not fulfilled.

This article reveals the theoretical and practical relevance of the researched topic examines the existing approaches used by Latvian companies for measuring the value of long-lived assets and considers the peculiarities of information disclosure in their financial statements. Particular attention is paid to the importance of measuring assets impairment using the example of a Latvian fuel retail company. The authors’ conclusions based on the study of Western publications and analysis of Latvian practices will be useful for the company management when forming the company’s accounting policy for measuring and valuing long-lived assets, and may be taken into consideration by investors when developing investment strategies.