Question

A company reverses an earlier impairment loss because of estimates that indicate recovery. How is reversal treated?

Q: Answer-A company reverses an earlier impairment loss because of estimates that indicate recovery. How is re...

Reversal allowed except for goodwill and normally recognised in PL subject to limits if asset carried at revalued amount, reversal goes to OCIrevaluation reserve.

A treated? A. Reversal

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

C Reversal increases equity directly without affecting P&L

D Reversal is not allowed under Ind AS

E Reversal treated as a capital receipt

Practice Next