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

question 1

Multiple Choice

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.

Appreciate the importance of white space in designing readable business documents.

Understand the components and purposes of financial statement analysis.

Recognize the roles of internal and external users in financial statement analysis.

Appreciate the importance of standards for comparison in financial analysis.