Smooth Sailing’s cruise ship does not fall into any exception of IAS 36, so IAS 36 should apply to impairment of cruise ship. Smooth sailing’s nonrecourse debt should not be included for the recoverability test according to this regulation. 2. Cruise Ship should be impaired based IAS 36-12 IAS 36 provides guidance on which indications entities should consider in determining impairing an asset and Smooth Sailing’s case meets the *indications listed in IAS. IAS 36-12 In assessing whether there is any indication that an asset may be impaired, an entity shall consider, as a minimum the following indications. External source of information:
b) Significant changes with an adverse effect on the entity have taken place during the period, or will take place in the near future, in the technological, market economic or legal environment in which the entity operates o in the market to which an asset is dedicated.