Which of the following is NOT correct in relation to the reversal of an impairment loss of an individual asset?
A) When reversing an impairment loss the carrying amount cannot be increased to an amount in excess of the carrying amount that would have been determined had no impairment loss been recognised;
B) For a depreciable asset there needs to be a calculation of carrying amount using the depreciation variables applied before the impairment loss to determine what the carrying amount would have been if there had been no impairment loss;
C) If the individual asset is recorded under the cost model, then the increase in the carrying amount is recognised immediately in profit or loss;
D) Where the recoverable amount is less than the carrying amount of an individual asset, the reversal of a previous impairment loss requires adjusting the carrying amount of the asset to recoverable amount.

Question

Quizplus · Accepted Answer

Option D is not correct because when reversing an impairment loss, the carrying amount of the asset is adjusted up to the recoverable amount, which may still be lower than the original carrying amount. The impairment loss is only reversed up to the amount that would have been recognized if no impairment loss had been recognized in prior periods. Options A, B, and C are all correct statements regarding the reversal of an impairment loss.

Which of the Following Is NOT Correct in Relation to the Reversal