This highly interactive tutorial gives students the opportunity to practice their understanding of the impairment of fixed assets. Various scenarios (assets held for sale, land, machinery & equipment, and intangibles) relating to the application of IAS 36, Impairment of Fixed Assets, are provided. Content of the pdf file and IAS 36 that have been included should be studied before completing the scenarios. Estimated completion time: 60 minutes.
Type of Material:
Assigned for individual review and practice or perhaps an in-class demonstration or group exercise.
Internet Access, Browser, Headphones/speakers,
Identify Major Learning Goals:
To understand the concepts and calculations relating to impairment of fixed and intangible assets.
Target Student Population:
College--undergraduate or graduate.
Prerequisite Knowledge or Skills:
General understanding of fixed assets as would be covered in an introductory financial accounting course.
Basic rules for impairments based on IAS 36 the pdf documents provided in the module.
Evaluation and Observation
This tutorial provides a clear and concise presentation of asset impairment issues. The content is current, relevant, and informed by scholarship. Concept coverage is comprehensive.
Definitions of fair value, value in use, and carry amounts are thorough.
By studying the linked materials, including IAS 36, prior to completing the module, it becomes self-contained.
The first scenario provides a “walk through” for users to understand how to use the learning object functions.
The level of feedback is adequate and pedagogically sound for wrong answers. Users are not allowed to leave a calculation box blank.
In a couple of places the feedback could have been a little more thorough. For instance, on the first screen when being asked to identify which fixed asset categories should be subject to impairment tests, feedback could have been more substantive other than correct or incorrect.
Potential Effectiveness as a Teaching Tool
This module is a very effective and efficient tool for demonstrating asset impairment issues in class or assigned as a tutorial to be completed as homework. The tutorial uses real world scenarios based on Martha's Food Stores, which links theory to practice.
Concepts are reinforced progressively as a result of the walk-through provided by Scenario 1.
Pedagogically sound coverage is provided in Scenario 5 where no impairment test is required.
Rounding issues in Scenarios 1 and 4 may result in some responses being judged incorrect.
For example, the accumulated depreciation per property must be rounded to the ones digit before multiplying the amount by 3. Similarly, computing accumulated depreciation collectively on all 3 properties yielded a $1 error.
In addition, the present value computation for Scenario 4 requires the response be given to two decimal places. However, the decimals determined will differ depending on the present value interest factor used or the number of decimal places to which one's financial calculator has been set. The table that can be downloaded to illustrate how the figure was derived does not provide a present value factor. Instead it shows the determination on a year by year basis.
Explicit feedback on determining the carrying value of land in Scenario 2 similar to that provided for Scenario 1 is not available.
Similarly, Scenario 3 does not explain how amounts were derived as well.
Ease of Use for Both Students and Faculty
Accountsville - Impairment of Fixed Assets is extremely impressive and visually appealing in terms of layout and design. Pop-ups are used effectively to provide desired supplemental information.
The incorporation of graphics is outstanding.
Excellent use of multimedia.
Navigation instructions, though sometimes not readily apparent, are present throughout to guide users, and the all navigation functions as intended. Careful reading is required so as not to miss them.
Directions are explicit.
The level of interaction included makes this module a truly engaging tutorial.
The scenarios are cleverly layered behind each other and entered by clicking on the scenario number located top right. It took a bit of trial and error to notice that once a new scenario is entered, its identification number moves to top left. Instructors might wish to demonstrate the navigation prior to assigning the module for use.
While not necessary a concern, students probably should be advised to read directions carefully. Sometimes responses must be made rounding to the nearest dollar while other times dollars and cents are required. The module instructions do indicate how each value should be entered, but an undiscerning eye may miss them.
Other Issues and Comments:
Accountsville - Accounting for Impairments is exceptionally creative and professionally executed. It is an outstanding learning object.