Skip to content

CMA Final · Corporate Financial Reporting · Impairment of Assets (Ind AS 36)

Under Ind AS 36, which statement about an impairment loss recognised for goodwill is correct?

An impairment loss recognised for goodwill is not reversed in a subsequent period. Any later recovery in value is treated as internally generated goodwill, which cannot be recognised, so the loss stays even if the recoverable amount improves.

  1. AIt may be reversed in a later period if the recoverable amount recovers
  2. BIt must be reversed once the indicators of impairment cease to exist
  3. CIt is reversed only to the extent of internally generated goodwill
  4. DIt is not reversed in a subsequent periodCorrect

Explanation

Ind AS 36 prohibits reversal of an impairment loss recognised for goodwill in a subsequent period. Later increases in value would be internally generated goodwill, which cannot be recognised.

Did you get it right without looking?

One question tells you little. A timed set on Impairment of Assets (Ind AS 36) shows your real accuracy, how long you take and where you lose marks.

Practise Impairment of Assets (Ind AS 36)Free diagnostic mock

More Impairment of Assets (Ind AS 36) questions