A private lumber company wrote its cedar inventory down to net realisable value last year. Prices have recovered. Under ASPE, the company:

Answer

May reverse it, capped at the original write-down

Options - A. May reverse it, capped at the original write-down - B. May not reverse it; only an IFRS reporter may reverse - C. Must restate last year’s statements for the recovery - D. May reverse it only if it switches to IFRS first Why - A. Correct — ASPE Section 3031 is converged with IAS 2: a write-down is reversed when NRV recovers, capped at the original write-down. - B. The no-reversal regime is US GAAP. There is no IFRS-vs-ASPE difference on LCNRV reversal. - C. A recovery in NRV is a change in circumstances in the current period, not a prior-period error. - D. No framework change is needed; both Canadian frameworks permit the reversal.

Lyryx IFA Vol 1 §2.7, §10.6; Lyryx IFA Vol 2 §12.9, §18.6; IAS 2, IAS 36, IAS 37