Final answer:
Under ASPE, impairment losses cannot be reversed once recognized. However, under IFRS, impairment losses can potentially be reversed if the estimates used to determine the asset's recoverable amount change, subject to certain limitations.
Step-by-step explanation:
Whether an impairment loss can be reversed depends on the accounting framework used by the company: Accounting Standards for Private Enterprises (ASPE) or International Financial Reporting Standards (IFRS).
ASPE
Under ASPE, once an asset's impairment loss is recognized, it cannot be reversed in subsequent periods. This is due to the principle that asset should not be carried above its recoverable amount, and the conservatism principle whereby losses are recognized but gains are not until they are realized.
IFRS
Under IFRS, the impairment loss can potentially be reversed if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognized. However, the reversal is subject to limitations, such as the asset's carrying amount after reversal should not exceed the carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized in prior periods.