METHODOLOGY FOR IDENTIFYING CASHGENERATING UNITS AND ADJUSTING THE DISCOUNT RATE TO NATIONAL CAPITAL MARKET CONDITIONS IN THE IMPAIRMENT ASSESSMENT OF LONG-TERM ASSETS

Abstract

The article examines two key elements of impairment assessment for non-current assets in jointstock
companies: the identification of cash-generating units and the determination of the discount rate applied
in calculating the recoverable amount. The article proposes an approach to identifying cash-generating units
based on the criteria of functional and technological interdependence of assets and their ability to generate
independent cash flows. The limitations of directly applying internationally accepted methods for determining
the discount rate in the national capital market are analyzed, and an adapted methodology is developed by
supplementing the weighted average cost of capital (WACC) with country risk and industry risk premiums.
Using the example of the telecommunications, postal, IT, and insurance industries, the procedure for identifying
units and differentiating the discount rate is presented. It is substantiated that the application of the proposed
methodology increases the validity of impairment test results.