Final answer:
The statement is false. ASPE does not use the rational entity approach to impairment, and it does not allow for the reversal of impairment losses on non-financial assets.
Step-by-step explanation:
The statement that ASPE (Accounting Standards for Private Enterprises) requires the use of the rational entity approach to impairment, and that impairment losses may be reversed, within limits, is false.
ASPE uses a cost recovery model for impairment and does not permit a reversal of impairment losses on non-financial assets.
When an asset’s carrying amount exceeds the total undiscounted future cash flows expected from its use and eventual disposal, an impairment is recognized and the carrying amount of the asset is written down to its fair value or, if not determinable, its cost less amortization.
Once an impairment loss is recognized, it cannot be reversed under ASPE.