CA Final · Financial Reporting · Ind AS 34 Interim Financial Reporting

Narmada Retail Ltd reports half-yearly. At 30 June it recognised an impairment loss on goodwill of a subsidiary. By 31 March year-end, the circumstances improved and the goodwill's recoverable amount rose above the carrying amount. The CFO proposes to reverse the June impairment in the annual statements because the interim measurement was only provisional. What is the correct treatment under Ind AS 34 Appendix A read with Ind AS 36?

The goodwill impairment loss must not be reversed. Ind AS 36 prohibits reversal of goodwill impairment in a subsequent period, and Ind AS 34 requires that reporting frequency not affect annual results, so the loss recognised at the interim date remains in the annual financial statements.

1. AReverse the loss fully, since interim measurements are provisional and annual results prevail
2. BReverse the loss only up to the original cost of goodwill
3. CReverse half of the loss, since the interim period is half of the year
4. DDo not reverse it, because an impairment loss recognised for goodwill cannot be reversed in a subsequent periodCorrect