Boxer purchased a non-current asset on 1 January 20X1 at a cost of $30,000. At that date, the asset had an estimated useful life of ten years. Boxer does not revalue this type of asset, but accounts for it on the basis of depreciated historical cost. At 31 December 20X2, the asset was subject to an impairment review and had a recoverable amount of $16,000. At 31 December 20X5, the circumstances which caused the original impairment to be recognised have reversed and are no longer applicable, with the result that recoverable amount is now $40,000.Required:Explain, with supporting computations, the impact on the financial statements of the two impairment reviews.

Answer rating: 100% (QA)

The core principle in IAS 36 is that an asset must not be carried in the financial statements at mor... View the full answer