This free, guided checker walks your finance team through the key decision points for IAS 36 Reversal of Impairment Loss. Answer a few questions to see the likely treatment and the evidence to document.
Answer a few quick questions below. It is private - nothing is submitted or stored - and takes about a minute.
This tool is a high-level IFRS screening aid for general information only and is not accounting, audit or legal advice. Conclusions require entity-specific evidence and judgement - confirm the treatment with your advisor.
Here is what the checker asks and why each step matters. Prefer to talk it through? Contact us and we will help directly.
Reversal is permitted only when a prior impairment charge exists; assets never impaired cannot use this reversal workflow.
No prior impairment exists; apply indicator-based impairment testing under IAS 36.9-12, or annual testing under IAS 36.10, instead of reversal analysis.
Official guidance: IFRS issued standards
IAS 36.124 prohibits reversal of any impairment loss recognized for goodwill; only non-goodwill CGU assets may be reversed.
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Official guidance: IFRS issued standards
Reversal requires evidence that recoverable amount has increased because of changed estimates, not merely passage of time or unwinding of discount on a liability-linked asset.
Without changed estimates, no reversal is recognized and the impaired carrying amount is retained; unwinding of the discount alone never supports reversal (IAS 36.114; IAS 36.116).
Official guidance: IFRS issued standards
Individual assets with independent cash inflows are tested alone; other assets require CGU-level comparison including allocated corporate assets but excluding most liabilities unless recoverable amount is net of debt.
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Official guidance: IFRS issued standards
Use the same methodology as the original impairment test with updated cash-flow projections, discount rates, and market evidence reflecting current conditions.
Complete the recoverable-amount calculation - the higher of VIU and FVLCD under IAS 36.18 - before assessing reversal under IAS 36.114.
Official guidance: IFRS issued standards
A reversal is triggered only when recoverable amount is higher than carrying amount after prior impairment write-downs.
Recoverable amount does not exceed carrying amount, so no reversal is recognized (IAS 36.114); retain the updated test as evidence and continue monitoring.
Official guidance: IFRS issued standards
IAS 36.117 caps reversal at the lower of recoverable amount and depreciated historical cost; revalued assets follow IAS 16 or IAS 38 revaluation rules.
Reduce the reversal to the IAS 36.117 cap; any increase above notional depreciated cost is a revaluation accounted for under the standard applicable to the asset (IAS 36.118).
Official guidance: IFRS issued standards
Goodwill impairment is never reversed; reversal increases are allocated to CGU assets on a pro-rata basis subject to each asset's individual reversal cap.
Complete the CGU reversal allocation before posting entries: pro rata to non-goodwill assets (IAS 36.122), with per-asset ceilings and reallocation of constrained amounts (IAS 36.123).
Official guidance: IFRS issued standards
Reversals of revalued assets adjust the revaluation surplus in other comprehensive income to the extent of prior impairment charged to OCI; the remainder goes to profit or loss.
Determine the OCI versus profit-or-loss split before recognition; reversals of revalued assets are credited to OCI except to the extent the prior impairment was recognized in profit or loss (IAS 36.120).
Official guidance: IFRS issued standards
Future depreciation or amortization must reflect the revised carrying amount from the reversal effective date; prior periods are not restated except for revaluation model adjustments.
Update depreciation schedules before finalizing reversal entries; IAS 36.121 requires the revised carrying amount, less residual value, to be allocated systematically over the remaining useful life.
Official guidance: IFRS issued standards
Disclose the amount reversed by class of asset and reportable segment, and describe events that caused the change in estimates used to determine recoverable amount.
Recognize the capped impairment reversal, adjust prospective depreciation (IAS 36.121), and finalize the IAS 36.126 and IAS 36.130 disclosures. Complete the IAS 36.126 and IAS 36.130 disclosure draft before impairment reversal sign-off.
Official guidance: IFRS issued standards
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