Seems to confuse everybody here… only debt (both HTM and AFS) impairment under IFRS can be reversed? Can anyone summarize?
Your above statement is correct.
Equity method - what if you impair an investment carried via equiy method. Is it tru that even under IFRS you cant reverse it?? That always threw me off.
GAAP HTM can also be reversed.
jmac01 Wrote: ------------------------------------------------------- > GAAP HTM can also be reversed. Well, not quite according to the CFAI Mock (PM Q36)… “Impairment of a held-to-maturity investment is recognized in net income under both U.S. GAAP and IFRS, but only IFRS allows the subsequent reversal of an impairment loss.”
I dont think you can reverse ANYTHING under GAAP.
Fair enough. This distinction is not made in Schweser. I guess I need to go over the mock again. Seems strange. I guess you have a gain when it matures?
GAAP doesn’t recognize impairment reversals. IFRS equity simply recognizes a gain in the P&L. IFRS debt recognizes an impairment reversal by marking up the carrying value of the debt security. Impairment for equity method investments under both IFRS and GAAP is not reversible.
why would you want to reverse, when you sell it ,you record a bigger gain!!! i wouldn’t reverse if they paid me.
why would you record a bigger gain?