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what is the difference between a revaluatoin decrease and impairment loss? are they the same thing?
reversal on revaluatoin:
if reverse a previous revaluation decrease, the amount for previous decrease (treated for expense at that time) should be treated as income, balance should be treated as revaluation reserve, right?reversal on impairment (IAS36):
pls refer to BPP page 92, example
In which case, the asset can not be revalued to a carrying amount that is higher than its value would have been if the asset had not been impair originally.
it means if my total asset is 140M(goodwill 40m, patent 20m, TA80m), impaired to 60M (TA 60m); current value=90m, TA is 70m if the previous impairment did not take place, why I can only revalue my TA to 70m, goodwill and patent are still zero? where is the balancing 20m? (90m-70m)please explain to me, thank you!
Hi
The remaining 20 isn’t anywhere! It’s not recognised and remains therefore as written off. Even if you were allowed to restore TA to 80 you would still have a “missing 10”!
No, once you’ve impaired something like goodwill and other intangibles, that’s it – you cannot unimpair them.
thank you, so can I unimpair TA back to 80? and patent+goodwill = 10? The current value is 90, where is the missing 20 then? if the TA is only 70 and can not unimpair patent and goodwill, how come the current value is 90?
ill simplify the case:
1st : TA impaired 80-60= 20 (Impairment loss) right!
Snd: TA was test for impairment after three years and the recovrable amount is now worth 90 M
SO to calculate the impairment: 90-60 so the difference in impairment is
30-20=10 (reversal of impairment)
Now the standared said IA cannt be revalued into carrinf amount that is higher that value has the asset not impaired originally !
i.e carrying amount before impairment is 70 (given) and the new revalued amount is 90 .Now the treatment is that reversal goes to P&L the 10M and the carring amount of the asset should stay at 70 .
hope this would help .thank you hsjubbiely , can I repeat:
1. once IA is impaired, it can not be reversed.
2. TA can not be reversed higher than its original value, any excess should be recognized as income in P&L, because this case we consider depreciation, so, it can not be higher than 70.in this case, the treatment for 90 is, 10 to its TA (to 70), 20 to P&L.
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