Theoretical and Practical Aspects of Impairment of Non-Cash-Generating Assets in the Public Sector Entities, according to the International Public Sector Accounting Standard (IPSAS) 21

Mariam Vardiashvili




International Accounting Standards pay a special attention to the asset measurement issues, The assent held by the public sector entities bring an economic benefit, or are used in the free delivery of services. The assets which carry the service potential, do not generate the cash flows, but  generate a material basis for implementation of main functions of the public organizations.  The issues related to impairment of the cash-generating and non-cash-generating assets are discussed in IPSAS 21 and IPSAS 26. Actuality of the issue is conditioned by circumstance that in case of impairment of the non-cash-generating assets, the methods of measurement of value of their  use differ from measurement of the value of use of those assets, which bring an economic benefit.

The Article considers the issues of determination of impairment of the non-cash-generation assets and recognition of the losses caused by such impairment in the public sector entities, according to the International Accounting Standards.

Objective. A purpose of the Article is determine  to analyze the  theoretical aspects of determination and recognition of the losses caused by  impairment of the non-cash-generating assets and, to reflect the same in the financial reporting according to IPSAS 21 -  “Impairment of Non-Cash-Generating Assets”.




Key words: Impairment; Non-cash-generation assets; Recoverable cost of use; Cost of use ; Depreciation amount; Restoration cost Approach; Service units method.


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