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Hello Mike,
if the impairment reverses a previous gain
taken to the revaluation reserve.
In this case, the impairment will be taken first to the revaluation reserve (and
so disclosed as other comprehensive income) until the revaluation gain is
fully exhausted and then the excess is taken to the statement of profit or loss. Can you explain this?If an impairment reverses a previous gain, surely it makes sense to “undo” the treatment that was effected when that previous gain was recognised (through oci)
But if the impairment exceeds that previous gain, we can only use the value of the previous gain against the revaluation reserve … because that’s all there is in the revaluation reserve.
So any impairment that is greater than the previous revaluation must be expensed … but this time it’s treated like an ‘ordinary’ expense (like depreciation) and is written off to profit or loss
OK now?
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