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Swiss GAAP FER 20: What It Is & How It Works
Learn how Swiss GAAP FER 20 covers asset impairment, testing, recoverable amount, reversals, and disclosures for Swiss businesses.
Élodie Rochat
11 August 2026
8 minutes read
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Swiss GAAP FER 20: What It Is & How It Works
Learn how Swiss GAAP FER 20 covers asset impairment, testing, recoverable amount, reversals, and disclosures for Swiss businesses.
Services fiduciaires
Introduction
Swiss GAAP FER 20 is the Swiss accounting standard for identifying and reporting asset impairment. When signs suggest that an asset has lost value, the company compares its carrying amount with its recoverable amount. An impairment exists when the carrying amount is higher.
Under FER 20, the recoverable amount is the higher of the asset's net selling price and value in use. The standard helps companies avoid keeping assets on their balance sheets at values that can no longer be supported.
This guide explains when impairment testing is required, how the test works, how losses and reversals are handled, and what Swiss businesses need to disclose.
What Is Swiss GAAP FER 20?
Swiss GAAP FER 20, “Impairment,” is part of the wider Swiss GAAP FER accounting framework. It sets out how organisations identify possible impairment and determine its effect on the annual financial statements.
The standard has applied since 1 January 2007. Its core purpose is simple: an asset should not remain on the balance sheet at an amount higher than what the organisation can recover from it.
Three terms are central:
- Carrying amount: The value currently recorded for the asset.
- Recoverable amount: The higher of net selling price and value in use.
- Impairment loss: The amount by which the carrying amount exceeds the recoverable amount.
As of 2026, the Swiss GAAP FER Foundation's current project list does not show a specific revision project for FER 20.
Does Core FER Require Swiss GAAP FER 20?
Not every organisation applying Swiss GAAP FER uses FER 20 directly.
Smaller organisations can limit themselves to Core FER if they do not exceed two of three thresholds for two consecutive years: CHF 10 million in balance sheet total, CHF 20 million in annual sales revenue, and 50 full-time positions on annual average.
Core FER includes Swiss GAAP FER 2, which already addresses valuation and possible impairments. FER 20 belongs to the further Swiss GAAP FER standards and provides more specific impairment guidance.
Swiss GAAP FER 20 vs IAS 36
Swiss GAAP FER 20 and IAS 36 share the same broad goal: preventing assets from being carried above recoverable value. However, IFRS provides more detailed requirements.
Main topic
Swiss GAAP FER 20Asset impairment
IAS 36Asset impairment
Main comparison
Swiss GAAP FER 20Carrying vs recoverable amount
IAS 36Carrying vs recoverable amount
Recoverable amount
Swiss GAAP FER 20Higher of net selling price and value in use
IAS 36Higher of fair value less costs of disposal and value in use
Style
Swiss GAAP FER 20Concise, principles-based
IAS 36More detailed
Main users
Swiss GAAP FER 20Swiss GAAP FER reporters
IAS 36IFRS reporters
Under the IAS 36 impairment standard, certain assets such as goodwill and indefinite-life intangible assets also require annual testing regardless of whether an indicator exists.
For broader context, see Fiduciaire Genevoise's guide to IFRS accounting standards.
When Is an Impairment Test Required?
Swiss GAAP FER 20 follows an indicator-based approach. A company first looks for evidence that an asset may no longer support its recorded value. If such an indicator exists, it determines the recoverable amount and compares it with the carrying amount.
The warning signs can come from outside or inside the organisation.
External Impairment Indicators
External signals may include:
- A major decline in an asset's market value
- Weaker demand for a product or service
- Serious deterioration in market or industry conditions
- Regulatory or technological changes that reduce an asset's usefulness
- Changes that weaken the expected economics of an investment
A single change does not always prove impairment. It can, however, trigger the need for a closer review.
Internal Impairment Indicators
Warning signs may also come from the company's own operations, such as:
- Physical damage
- Technological obsolescence
- An asset becoming idle
- Continued underperformance
- Lower revenue or cash flow forecasts
- Closure or restructuring plans
- A decision to stop using a product, system, or facility
Technology businesses should pay particular attention to capitalised software and development projects. The Swiss GAAP FER 10 rules for intangible assets connect directly with FER 20 when an intangible asset may be impaired.
How Does the Swiss GAAP FER 20 Impairment Test Work?
The Swiss GAAP FER 20 impairment test can be broken into five practical steps.
Step 1: Identify the Asset or Asset Group to Test
Start by identifying the asset affected by the impairment indicator.
FER 20 normally requires individual asset valuation. However, some assets cannot generate independent cash flows. In that case, the recoverable amount is determined for the smallest group of assets that produces cash flows independently.
This prevents businesses from testing an asset in isolation when its economic value depends on other assets.
Step 2: Determine the Carrying Amount
Next, confirm the carrying amount recorded in the financial statements.
For a depreciable or amortisable asset, this normally reflects the original recognised cost after accumulated depreciation or amortisation and previous impairment adjustments.
The carrying amount becomes the benchmark for the impairment test.
Step 3: Calculate the Recoverable Amount
FER 20 defines recoverable amount as the higher of net selling price and value in use.
The net selling price reflects the amount that can be obtained from selling the asset after relevant selling costs.
Value in use focuses on the economic value the organisation expects to obtain from continuing to use the asset.
Management should base the calculation on supportable information. For example, forecasts used to assess future economic value should reflect current business conditions rather than an outdated budget.
Step 4: Compare Recoverable Amount With Carrying Amount
Once both values are available, the test becomes straightforward:
If carrying amount > recoverable amount, an impairment exists.
For example:
- Carrying amount: CHF 500,000
- Recoverable amount: CHF 420,000
- Impairment loss: CHF 80,000
The asset is therefore overstated by CHF 80,000 and must be adjusted.
Step 5: Recognize and Document the Impairment Loss
The final step is to record the adjustment and keep evidence supporting the decision.
Documentation may include forecasts, market information, asset registers, valuation assumptions, management approvals, and calculations.
Good documentation is especially important when value in use depends on management estimates. It gives auditors and other financial statement users a clear basis for understanding the adjustment.
How Is an Impairment Loss Recorded?
When the carrying amount exceeds recoverable amount, the asset is reduced to its recoverable amount.
Using the previous example, a CHF 500,000 asset with a CHF 420,000 recoverable amount requires a CHF 80,000 impairment.
Impairment should not be confused with normal depreciation or amortisation. Depreciation and amortisation allocate an asset's cost over its expected useful life. An impairment loss reflects an additional decline in value that was not already captured through that normal allocation.
For intangible assets, recognised impairment also affects the asset's subsequent carrying value.
Can an Impairment Loss Be Reversed?
Yes. Swiss GAAP FER allows impairment to be partially or fully reversed when the circumstances supporting the previous impairment change.
However, the reversal cannot simply be used to increase assets without a supportable basis.
Goodwill requires special attention in consolidated accounts. Under Swiss GAAP FER 30, impairment of a group of assets is first charged against related goodwill. When a loss is later reversed, the reversal is allocated to the affected assets except goodwill, within the specified carrying-value limits.
Companies dealing with acquisitions should therefore consider FER 20 together with Swiss GAAP FER 30.
What Must Companies Disclose Under FER 20?
Significant impairment losses and significant partial or full reversals must be disclosed individually in the income statement or in the notes. Companies must also explain the events and circumstances that led to the impairment or reversal.
In practice, clear reporting should help readers understand:
- Which asset or asset group was affected
- The amount of the impairment or reversal
- What caused the change
- Relevant valuation assumptions
- How the accounting treatment fits the company's policies
These disclosures help management, boards, lenders, investors, and auditors understand why an asset's reported value changed.
Common FER 20 Impairment Mistakes
The calculation itself is often the easy part. Problems usually arise from weak assumptions or processes.
Common mistakes include:
- Waiting until an asset has clearly failed before reviewing impairment
- Ignoring operational or non-financial warning signs
- Using outdated forecasts
- Relying on overly optimistic assumptions
- Testing the wrong asset group
- Failing to document management judgement
- Forgetting to reconsider previous impairments
- Missing material disclosures
- Confusing impairment with normal depreciation
- Reviewing FER 20 without considering related standards such as FER 10 or FER 30
A consistent impairment process makes year-end reporting easier and creates a stronger audit trail.
How Fiduciaire Genevoise Can Support FER 20 Reporting
Applying Swiss GAAP FER 20 involves more than comparing two figures. Businesses must identify the right assets, support valuation assumptions, record adjustments correctly, and prepare clear disclosures.
Fiduciaire Genevoise provides fiduciary and accounting services in Switzerland to support reliable financial reporting. Its team can help review accounting treatment, prepare financial information, assess FER compliance, strengthen documentation, and coordinate reporting requirements.
Conclusion
Swiss GAAP FER 20 helps ensure that assets are not reported above the value a business can recover from them. Effective compliance starts with identifying impairment signals, followed by a consistent test of carrying amount and recoverable amount.
The harder part is often supporting the assumptions, documenting the result, and connecting FER 20 with other reporting requirements.
FAQ
It depends on the Swiss GAAP FER framework the organisation applies. Smaller organisations that qualify for Core FER address impairment through FER 2, while FER 20 forms part of the further FER standards.
Élodie Rochat
Audit et contrôles
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