The overarching principle in financial reporting where assets are concerned is that they should not be carried in the balance sheet in excess of their recoverable amount. Where assets are impaired, they must be written down to their recoverable amount in order that they are not shown at an excessive value in the balance sheet.

For many assets, values may have changed significantly as a result of Covid-19 and ongoing economic uncertainty. Allowing assets to be overstated in the financial statements presents a misleading position and must be avoided.