ACCA SBR IAS 36 Impairment: 4 Mistakes the Examiner Keeps Flagging (June 2026)
IAS 36 keeps costing SBR candidates the pass
If IAS 36 impairment shows up in SBR June 2026 — and it will — there are four mistakes the examiner is tired of marking. Each one is worth marks you cannot afford to drop with a 50% pass rate.
SBR March 2026: 50% passed
Half the room failed in March. The examiner's reports keep returning to the same theme on impairment questions — candidates know the standard exists, but the calculations and the allocation rules slip. IAS 36 has appeared in nine of the last twelve SBR sittings. Treat it as a banker, not a "maybe."
Mistake 1: Wrong cash flows in value in use
The single most common error. Candidates include cash flows from future improvements to the asset — capex on enhancements, restructuring savings that haven't happened yet, or cash flows beyond a five-year forecast. IAS 36 is clear: VIU is the asset in its current condition. Strip out enhancement spend. Cap your forecast at five years unless management can justify longer. Use a pre-tax discount rate, not a post-tax WACC.
Mistake 2: Adding inventory and receivables to the CGU
Candidates pile every asset into the cash-generating unit total. Inventory sits under IAS 2. Trade receivables sit under IFRS 9. Both are excluded from the CGU's carrying amount for impairment testing. Add them in and your impairment loss is wrong before the allocation even starts.
Mistake 3: Allocating impairment in the wrong order (or to the wrong assets)
IAS 36.104 is non-negotiable. Allocate the impairment loss first to goodwill until goodwill is zero. Then allocate the remainder pro-rata across the other non-current assets in the CGU — never to inventory, never to receivables, never just to "the building." The examiner regularly sees candidates write off the whole loss against a single asset or hit current assets. Both score zero on allocation.
Mistake 4: Reversing a goodwill impairment
Goodwill impairment is never reversed. Ever. IAS 36.124. If a question scenario tempts you to write back goodwill in a later period, walk away from it. Other asset impairments can be reversed if the indicators reverse — goodwill cannot.
Wrong vs right: a quick VIU sketch
WRONG: Forecast cash flows include a £2m saving from a planned restructure in Year 3 and £1m of new capex efficiencies in Year 4. Discount at the post-tax WACC of 8%. Add inventory of £3m to the CGU.
RIGHT: Exclude the £2m restructure saving and the £1m enhancement — neither has happened. Discount at the pre-tax rate (gross up to roughly 10.7%). Exclude inventory and receivables from the CGU. Compare CGU carrying amount to the recoverable amount. Apply impairment first to goodwill, then pro-rata to the remaining PPE and intangibles only.
What to do before June 2026
1. Write the allocation rule on a flashcard. "Goodwill first — then pro-rata to other non-current assets — never inventory or receivables — never reverse goodwill." Read it before every impairment question.
2. Pre-tax or post-tax? IAS 36 requires pre-tax. If the question gives you a post-tax WACC, flag it and gross it up — and say so in your answer. The examiner pays marks for spotting the inconsistency, not just for the number.
3. Strip the cash flows. Every time you see "planned restructure", "new product line", or "enhancement", ask: has it happened? If not, it's out of VIU. Write that sentence in your answer.
Bottom line
Pass rate 50%. IAS 36 in 9 of the last 12 sittings. The standard hasn't changed — but the same four mistakes keep showing up in examiner reports. Fix them this week and you've banked an easy 8–10 marks on exam day.