![]() The reversal of an impairment loss reflects an increase in the estimated service potential of an asset (either from use or from sale) since the date when an entity last recognised the impairment loss for the asset. Evidence is available from internal reporting that indicates the economic performance of an asset is, or will be, better than expected.Significant favourable changes (have occurred or are expected) in the extent to which an asset is used (or is expected to be used) (eg, costs incurred during the period to improve or enhance the asset’s performance or restructure the operation to which the asset belongs).Market interest rates or other market rates of return on investments have decreased during the period (which will decrease the discount rate used in caluclating the asset’s value in use (VIU)).Significant favourable changes (have occurred or are expected) in the technological, market, economic or legal environment.Observable indications that the asset’s value has increased significantly during the period.Non-exhaustive list of impairment reversal indicators from IAS 36 Similar to the list provided in IAS 36 indicating when there might be an impairment loss, the Standard also provides a nonexhaustive list of circumstances when a previously recognised impairment loss may no longer exist. IAS 38 ‘Intangible Assets’ prohibits the recognition of internally generated goodwill.Īccordingly, the references to impairment reversals in this article do not include goodwill. The reason for this is because IAS 36 views any increase in the recoverable amount of goodwill after the recognition of an impairment loss to likely be an increase in the internally generated goodwill (not a reversal of the impairment loss recognised for the acquired goodwill). IAS 36 prohibits any reversal of impairment losses recognised on goodwill. Guidance note: Goodwill impairment cannot be reversed If an indication of possible reversal is identified, the entity must estimate the recoverable amount of that asset. In addition to assessing evidence of possible impairment, entities must also assess whether there is any indication a previously recognised impairment loss for an asset (other than goodwill) no longer exists or the assessed impairment amount may have decreased. Indicators for reversing an impairment loss
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