IAS 36Chapter 11Lesson 1
Reversing an impairment loss: indicators, conditions and the cap for an asset
Step 1 of 8Learning objectives
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An impairment loss is not necessarily permanent. If the situation improves and the estimates used to determine the recoverable amount change, the loss (other than on goodwill) may be reversed — but never above the carrying amount the asset would have had without the impairment, net of depreciation. This lesson shows when and how.
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Learning objectives
- Identify the external and internal indications that a past impairment loss has decreased or no longer exists.
- Check that a reversal rests on a change in estimates, and not merely on the passage of time (unwinding of the discount).
- Calculate the reversal for an individual asset, capped at the carrying amount it would have had without the impairment, net of depreciation.
- Record the reversal (in profit or loss, or partly in other comprehensive income for a revalued asset) and revise future depreciation.