Accounting for Impairments

US GAAP – SFAS 121/144

No reversal of prior impairments is allowed, unless the asset is held for disposal. The impairment test involves comparing undiscounted cash flows to carrying value.

IFRS – IAS 36

Unlike US GAAP, IFRS allows for reversals except for an impairment of goodwill. The impairment test involves comparing carrying value to recoverable amount, which is higher of net realizable value or value in use.

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