Final answer:
Lisa might have recorded the increase in asset value due to either using GAAP accounting rules or because the asset is classified differently—potentially being held for disposal—allowing for the increase to be recorded, whereas Elizabeth did not record the increase possibly due to using IFRS accounting rules or because of the asset being currently in use, where such reversals of impairment may not be permitted. Option A is correct.
Step-by-step explanation:
Lisa and Elizabeth are both calculating asset values to determine if any previously impaired assets are further impaired. Instead of additional asset impairment, they found that they each had an asset that had increased in value. Lisa recorded this increase in value, but Elizabeth did not. The reason for the difference in their reporting could be due to the accounting frameworks they are using or the different purposes for which the assets are held.
If Lisa is using GAAP accounting rules, she would be permitted to report the increased value of the asset if it is related to certain transactions, such as if the asset is categorized as 'available for sale'. IFRS accounting rules generally do not allow for the reversal of impairment losses if the assets in question are property, plant, and equipment or intangible assets being held for use, but they do allow for the reversal if the asset is carried at revalued amount or if it is related to financial assets.In the context of assets being held for disposal or in use, GAAP and IFRS may have different regulations regarding the recording of their values. If Lisa's asset is being held for disposal, she might be following either GAAP or IFRS allowance rules to record the increase, while if Elizabeth's asset is currently in use, under IFRS she may not be able to record the increase unless specific criteria are met.