BCZ182 IAS 36 requires that an impairment loss for an asset other than goodwill should be reversed if, and only if, there has been a change in the estimates used to determine an asset’s recoverable amount since the last impairment loss was recognised.
BCZ183 Opponents of reversals of impairment losses argue that:
(a) reversals of impairment losses are contrary to the historical cost accounting system. When the carrying amount is reduced, recoverable amount becomes the new cost basis for an asset. Consequently, reversing an impairment loss is no different from revaluing an asset upward. Indeed, in many cases, recoverable amount is similar to the measurement basis used for the revaluation of an asset. Hence, reversals of impairment losses should be either prohibited or recognised directly in equity as a revaluation.
(b) reversals of impairment losses introduce volatility in reported earnings. Periodic, short‑term income measurements should not be affected by unrealised changes in the
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