CAF-1 · Chapter 5 · Question 3 of 15
An entity previously recognized an impairment loss on an asset carried under the cost model. If the reasons for the impairment subsequently reverse, what is the upper limit for the new carrying amount?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized in prior years.
Explanation
IAS 36 limits the reversal of an impairment loss. The increased carrying amount of an asset attributable to a reversal cannot exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized in prior years.
More IAS 36 Impairment of Assets MCQs
- Q5Which of the following is defined as the 'value in use' of an asset?
- Q6Which of the following assets is OUTSIDE the scope of IAS 36 Impairment of Assets?
- Q7Which of the following represents an INTERNAL indication that an asset may be impaired?
- Q8Which of the following represents an EXTERNAL indication of potential impairment?
- Q9If an asset is carried at a revalued amount under IAS 16, how is an impairment loss treated?