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Hi sir, could you plz help me with an example just hypothetical numbers showing the double entries/ effects of impairement loss reversal because when i read the standard its really hard for me to sink in. Thanks
Hi,
What is it that you do not specifically understand about the impairment reversal?
If there is a reversal then the reversal goes to the same place where the original impairment was recorded, so if it went through profit or loss then the reversal goes through profit or loss. You then just need to be careful as the reversal can only increase the value of the asset to where it would have been if there had been no impairment. So if we had an increase in the value of a previously impaired asset from 70 to 90, but it would have been recorded at 80 if there was no impairment previously then we’d only be able to increase the asset to the 80 from the 70.
Hope that helps slightly.
Thanks
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