CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

Under U.S. GAAP, if the fair value of a long-lived, tangible asset increases after an impairment loss, ______

A. the loss cannot be reversed.
B. the loss can be reversed.
C. the accounting treatment depends on whether the asset is classified as held for use or held for sale.
Correct Answer: C

If the asset is held for use, then the loss cannot be reversed; otherwise, it can. However, the IFRS allow impairment losses to be reversed.

User Contributed Comments 5

User Comment
czar did it mean, when held for sale, it cannot be reversed
Jurrens no, re-read the wording. Held for use and held for sale have two different meanings.
jonan203 if held for use cannot be reversed...
msoentoro I thought in Study Notes its stated that impairment can not be restored??
Shaan23 I checked A but didnt read all the choices.

Msoentoro --- It can be reversed under GAAP only under one condition --- Held for sale.
You need to log in first to add your comment.