Reversal of impairment — OpenTuition Forums

NNelson2y ago

Hi Sir. I have noticed that in question where is reversal of impairment, it is expressly stated that the company is using the cost model to value its NCA. I was wondering what if the company was using the revaluation model. Will there not be reversal of impaiment. And that the carrying amount of the NCA will be the revalued figure

P2-D2Tutor2y ago#1

Hi, An impairment reversal of an asset under the cost model is relatively straight forward as the reversal will go through profit or loss to match to where the original impairment was taken. If held under the revaluation model then the reversal will go through OCI (reserves) first and if the reserve is used in full and there is a reversal still to process then it would go through profit or loss. This can therefor be tricky on the calculations. Thanks

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