Explain the IFRS Limitations on Reversal of Previously Recognized Impairment

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Examlex · Accepted Answer

The Answer is There are two important constraints:
1. The amount of the write-up (reversal) is limited to the amount of the original impairment loss. The reversal cannot exceed the original impairment loss.
2. The reversal cannot result in a company reporting a value that is higher than what it would be reporting if the asset had never been impaired.
Firms report a reversal of an impairment loss in income.

Explain the IFRS Limitations on Reversal of Previously Recognized Impairment

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