Dear Chris,
Could you just confirm that I have a correct knowledge regarding the reversal of impairment?
When impairment is reversed it shouldn't exceed the value it would have if the impairment was not done in the first place right?
Lastly, while impairing an asset, the value shouldn't fall below 0, and fair value, right?
Regards,
Ask the Tutor ACCA SBR
Reversal of Impairment
9y ago#1Hi,
Yes, it all sounds correct. There is a small criteria where the impariment can be taken above the carrying value if the impairment hadn't originally been done but I wouldn't stress about it, feel free to dog deep into the detail in IAS 36 for it.
Yes, it's impossible to reduce an asset below zero. It can be taken below fair value though as we look at the fair value less costs to sell in the recoverable amount, which is lower than fair value.
Thanks
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