Answer: €50,000

**Explanation:** Under IFRS, impairment losses can be reversed, but only up to the original carrying amount before the impairment. In this case: 1. The historical cost was €50,000. 2. After impairment in Year 1, the carrying value was reduced to €40,000. 3. In Year 2, the recoverable amount increased to €60,000. However, IFRS does not allow the carrying amount to exceed the original historical cost (€50,000) after a reversal. Therefore, the maximum allowable carrying amount on the Year 2 balance sheet is **€50,000** (Option B). Option A is incorrect because it ignores the possibility of a reversal under IFRS. Option C is incorrect because IFRS prohibits revaluing the asset beyond its original carrying amount, even if the recoverable amount is higher.

Author: LeetQuiz Editorial Team