IFRS allows reversal of impairment losses when
A) the reversal is greater than the amount of the original impairment.
B) the reversal falls in a subsequent fiscal year of the company's operations.
C) there has been a change in economic conditions or in the expected use of the asset.
D) reversal of impairment losses is never allowed.

Question

Quizplus · Accepted Answer

IFRS allows the reversal of impairment losses when there has been a change in economic conditions or in the expected use of the asset. This means that if the asset's value has increased or if the expected future cash flows from the asset have increased, the impairment loss can be reversed. However, the reversal cannot exceed the original impairment loss amount. This option is consistent with IFRS 9, which allows for the reversal of impairment losses in certain circumstances. Options A, B, and D are incorrect as they do not accurately reflect the conditions under which impairment losses can be reversed according to IFRS.

IFRS Allows Reversal of Impairment Losses When