(IFRS) for Small and Medium-sized Entities (SMEs)

IFRS FOR SMES – JULY 2009Reversal where recoverable amount was estimated for anindividual impaired asset27.30 When the prior impairment loss was based on the recoverable amount of theindividual impaired asset, the following requirements apply:(a)(b)(c)(d)The entity shall estimate the recoverable amount of the asset at the currentreporting date.If the estimated recoverable amount of the asset exceeds its carryingamount, the entity shall increase the carrying amount to recoverableamount, subject to the limitation described in (c) below. That increase is areversal of an impairment loss. The entity shall recognise the reversalimmediately in profit or loss.The reversal of an impairment loss shall not increase the carrying amountof the asset above the carrying amount that would have been determined(net of amortisation or depreciation) had no impairment loss beenrecognised for the asset in prior years.After a reversal of an impairment loss is recognised, the entity shall adjustthe depreciation (amortisation) charge for the asset in future periods toallocate the asset’s revised carrying amount, less its residual value (if any),on a systematic basis over its remaining useful life.Reversal when recoverable amount was estimated for acash-generating unit27.31 When the original impairment loss was based on the recoverable amount of thecash-generating unit to which the asset belongs, the following requirementsapply:(a)(b)(c)The entity shall estimate the recoverable amount of that cash-generatingunit at the current reporting date.If the estimated recoverable amount of the cash-generating unit exceeds itscarrying amount, that excess is a reversal of an impairment loss. The entityshall allocate the amount of that reversal to the assets of the unit, exceptfor goodwill, pro rata with the carrying amounts of those assets, subject tothe limitation described in (c) below. Those increases in carrying amountsshall be treated as reversals of impairment losses for individual assets andrecognised immediately in profit or loss.In allocating a reversal of an impairment loss for a cash-generating unit,the reversal shall not increase the carrying amount of any asset above thelower of(i)(ii)its recoverable amount, andthe carrying amount that would have been determined (net ofamortisation or depreciation) had no impairment loss beenrecognised for the asset in prior periods.164 © IASCF