BCZ95 IAS 36 requires that an impairment loss should be recognised whenever the recoverable amount of an asset is below its carrying amount. IASC considered various criteria for recognising an impairment loss in the financial statements:

(a) recognition if it is considered that the impairment loss is permanent (‘permanent criterion’);

(b) recognition if it is considered probable that an asset is impaired, ie if it is probable that an enterprise will not recover the carrying amount of the asset (‘probability criterion’); and

(c) immediate recognition whenever recoverable amount is below the carrying amount (‘economic criterion’).