In relation to the reversal of an impairment loss of an individual asset, which of the following is incorrect?

A) When reversing an impairment loss, the carrying amount cannot be increased to an amount in excess of the carrying amount that would have been determined had no impairment loss been recognised.
B) Where the recoverable amount is less than the carrying amount of an individual asset, the reversal of a previous impairment loss requires adjusting the carrying amount of the asset to recoverable amount.
C) For a depreciable asset, there needs to be a calculation of carrying amount using the depreciation variables applied before the impairment loss to determine what the carrying amount would have been if there had been no impairment loss.
D) If the individual asset is recorded under the cost model, then the increase in the carrying amount is recognised immediately in profit or loss.

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Feranmi Raymond · Accepted Answer

Final Answer : B, Explanation :  Option B is incorrect because it describes the process of recognizing an impairment loss, not reversing one. When reversing an impairment loss, the carrying amount of the asset is increased up to the limit of the carrying amount that would have been determined if no impairment loss had been recognized, not adjusted to the recoverable amount if it is less than the carrying amount.

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