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Corporate Accounting and Reporting: Doc

   

Added on  2021-05-30

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Running head: CORPORATE ACCOUNTING AND REPORTING Corporate Accounting and ReportingName of the Student: Name of the University: Author’s Note:

1CORPORATE ACCOUNTING AND REPORTINGTable of ContentsPart A.................................................................................................................................2Introduction.....................................................................................................................2Reversal of an Impairment loss of goodwill...................................................................2Conclusion......................................................................................................................5Part B.................................................................................................................................6Reference List....................................................................................................................8

2CORPORATE ACCOUNTING AND REPORTINGPart AIntroduction Chang and Yen (2015) has stressed on the fact that one of the essentialprinciples of accounting looks to address the fact that there is no need of assets thathave high valuations in the financial reports. In this way reversal of an impairment lossof goodwill is explained to be a scenario, within which the companies would discloseany of their assets to be valuable, which had been recorded as a loss of impairment insome earlier time period. Reversal of an Impairment loss of goodwill Sun and Zhang (2017) explained that if the cost of holding the asset is higherthan the true market value, then in this scenario, the asset is considered to be impaired.In the scenario, when there is a reversal of the loss of impairment, the asset is lookedupon to be valuable. Therefore, the asset is not considered to be a profit burden. Duringthe point of identifying the reversal of impairment, the carrying value that is associatedto the asset is increased to the amount that is newly recoverable. Subsequently, thevalue may not be higher than the actual value or the carrying amount after depreciationbecause of the fact that then it would mean that previously, there has not been anyrecognition of impairment. The reversal of the impairment loss is considered as theincome that is observed in the income statement of a firm. Schattet al. (2016) explainedthat if the carrying amount of the assets are at an amount that is re-valued, and earlierthere has not been any loss of impairment revaluation write-off, it is considered to be animpairment loss reversal.

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