Corporate Accounting and Reporting: Reversal of Impairment Loss Report
VerifiedAdded on 2023/06/05
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This report delves into the intricacies of corporate accounting, with a specific focus on the reversal of impairment loss, particularly concerning goodwill. The report begins by defining impairment loss and its implications, followed by an in-depth analysis of how the reversal of such losses is treated in corporate accounting, referencing AASB 136. It explains the circumstances under which impairment loss reversals are permissible, emphasizing the treatment of goodwill as an intangible asset and the restrictions on recognizing internally generated goodwill. Furthermore, the report elucidates the process of impairment testing, including the impact of business goodwill acquisition on cash-generating units. It details the procedures for conducting impairment tests, comparing cash inflows with actual cash flows, and determining recoverable values using enterprise or equity value. The report concludes by illustrating the conditions under which a reversal of impairment loss is warranted, considering changes in estimates of recoverable asset values and the potential modifications to asset amortization in future years.
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