In: Accounting
IAS 36 deals with the Impairment of Assets. Applicability of IAS 36 "Impairment of Assets" is as follows.
IAS 36 applies to all assets except: [IAS 36.2]
Therefore, it is clear that Inventory is out of scope of IAS 36.
Current Situation: Malak's Furniture store purchased specially designed Furniture to sell on the occasion of Ramadan. Due to COVID-19 pandemic, it unable to sell the specially designed Furniture. As a result of this, the value of the Furniture got declined.
Analysis: Malak's Furniture Store is involved in trading of Furniture. Therefore, Furniture becomes Inventory to it, which is covered by IAS 2.
Conclusion: The decline in the value of Furniture is not dealt by IAS 36.
Note: If you have any doubts or need any clarifications, feel free to reach us in comments. Kindly give your valuable feedback.