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    Question

    A company reverses an earlier impairment loss because of

    estimates that indicate recovery. How is reversal treated?
    A treated? A. Reversal Correct Answer Incorrect Answer
    B Reversal recognised in profit or loss to the extent that it increases the carrying amount up to what it would have been (net of depreciation) had no impairment loss been recognised previously; for revalued assets, treatment may differ Correct Answer Incorrect Answer
    C Reversal increases equity directly without affecting P&L Correct Answer Incorrect Answer
    D Reversal is not allowed under Ind AS Correct Answer Incorrect Answer
    E Reversal treated as a capital receipt Correct Answer Incorrect Answer

    Solution

    Reversal allowed (except for goodwill) and normally recognised in P&L (subject to limits); if asset carried at revalued amount, reversal goes to OCI/revaluation reserve.

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