Bartpart plc has 800 hectares of agricultural land among its non-current assets at cost of £4,400,000 as at 30 June 2013.

Owing to the general downturn in the agricultural sector, the directors have carried out an impairment review. |

The land has been rented out at an annual rent of £400 per hectare with five-yearly rental reviews. The rent has recently been renegotiated for the five years commencing 1 July 2013 at an annual rent of £350 per hectare.

Agricultural valuers have estimated that the land would realize £4,000 per hectare on a sale at 1 July 2013.

The required rate of return for Bartpart plc is 7%.

Required Advise the directors if an impairment has occurred and, if so, provide the accounting entry required to reflect the impairment in the accounts for the year to 30 June 2013.

Note: Land is assumed to have an indefinite life. The rental income should also be indefinite.