ACCA FR · Chapter 3 · Question 8 of 12
Which of the following statements about reversing impairment losses under IAS 36 is correct?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) An impairment loss recognised for goodwill must never be reversed
Explanation
IAS 36 prohibits reversing an impairment loss on goodwill, because any later increase is likely to be internally generated goodwill. For other assets a reversal is allowed, but only up to the carrying amount the asset would have had, net of depreciation, if no impairment had been recognised. For assets carried at cost, the reversal goes to profit or loss.
More Intangible assets, impairment and assets held for sale MCQs
- Q10On 1 October Godwit Co classified a building as held for sale. Its carrying amount was then $1,200,000. Its fair value was $1,050,000 and…
- Q11Which of the following would be presented as a discontinued operation under IFRS 5?
- Q12Lapwing Co's leisure division is a discontinued operation. For the year its revenue was $4.0m and its expenses were $4.6m, and the related…
- Q1Under IAS 38, which of the following internally generated items may be recognised as an intangible asset?
- Q2During the year Sanderling Co spent $120,000 on the research phase of a project. Development started on 1 March and all IAS 38…