An impairment loss can be reversed when:
A) there is no indication that the impairment loss no longer exists or has been reduced and there has not been a change in the estimates used to determine the assets recoverable amount.
B) with the exception of goodwill, all intangible assets carrying values exceed their fair market values.
C) the intangible assets carrying values exceed their undiscounted future cash flows.
D) with the exception of goodwill, the recoverable amount is determined and compared to the carrying amount. If the recoverable amount is greater than the carrying amount then the impairment loss previously recorded is reversed.

Question

Quizplus · Accepted Answer

According to International Accounting Standards (IAS) 36, the impairment loss can be reversed only if the recoverable amount of the asset (except for goodwill) is determined and compared to its carrying amount. If the recoverable amount is greater than the carrying amount, the previously recorded impairment loss can be reversed. It is important to note that impairment losses on goodwill cannot be reversed. Therefore, choice D is the best option.

An Impairment Loss Can Be Reversed When