CERTYNEX IFRS ACADEMY

Garonne Aéro impaired an assembly line in 20X1. Its management controller describes the analysis carried out at the end of 20X2. Which step is wrong?

Step 1: he notes that new long-term contracts have led to raising the forecast cash flows.

Step 2: he infers that a reversal indication exists and estimates a recoverable amount above the carrying amount.

Step 3: he refuses any reversal, as in his view a loss on an asset other than goodwill can never be reversed.

No step is wrong.