a. Determine the carrying amount of each of the assets of the cash generating unit as at 30 June 2018 and 30 June 2019. Show the computation of the impairment loss and reversal of impairment loss.

Blue Farming and Milk Industry Bhd (BFM Bhd) is a public listed company established in 2000. The company was incorporated in Malaysia, involved in dairy farming, manufacturing and distributing of dairy products. The following balances are for the year ended 30 June 2019. Note Dr RM'000 Cr RM'000 25,000 2 2 1 1 11,800 6,020 1,200 265 11,000 32,000 5,200 4,050 18,100 2,640 628 750 1 2 1 Sales Cost of sales Administration expenses Selling and distribution expenses Finance costs Land (at revaluation) Buildings (at revaluation) Equipment Machine A Machine B Motor vehicles Fixtures and fittings Goodwill Accumulated depreciation as at 1 July 2018: Buildings Equipment Machine A Machine B Motor vehicles Fixtures and fittings Biological assets Investment properties Investments Intangible assets Tax paid Accounts receivable Inventories Bank balances Ordinary shares 5% Cumulative preference shares Retained profits Revaluation reserve (land) 8% Debentures 1 3,840 988 770 1,905 792 251 3 5 940 4,000 2.100 794 277 2,320 510 447 45,000 10,000 9,280 450 5,000 2 2 4 Deferred income Accounts payable Accruals Interim dividend 300 1,760 230 6 525 105,566 105,566 The following notes are related to the balances given above: 1. On 1 July 2016, BFM Bhd acquired King Manufactures Sdn Bhd. During the acquisition, the equipment and machine A were revalued at RM5,200,000 and RM4,050,000 respectively. The agreed purchase consideration for the assets was RM10,000,000. The goodwill is derived from the acquisition. Some technical problems had caused both assets to be less productive during the financial year ended 30 June 2018. As at 30 June 2018, it was estimated that the expected value in use amounted to RM7,000,000. BFM Bhd determined that if the equipment and machine A were to be sold, the market value would be RM7,200,000. The cost to sell them was estimated at 5.5% of the fair value. For the financial year ended 30 June 2019, BFM Bhdhad conducted a major inspection on the equipment and machine A. The company also did some intensive technical adjustment to improve the capacity of the plants. Due to this reason, it was expected that the value in use would be increased by 5% as compared to the year ended 30 June 2018 projection and the net selling price was estimated to be RM7,200,000. It is the company's policy to depreciate equipment and machinesat 10% on carrying amount. Machine A has a salvage value of RM50,000. The depreciations of equipment and machines are part of cost of sales. Goodwill has indefinite useful life. 2. The building was revalued for the first time on 1 July 2015 where the revaluation result in a deficit of RM150,000. The remaining useful life of the building for on 1 July 2015 was 25 years. The building was revalued on 1 July 2018 at RM32,500,000. The land was also revalued for the first time on 1 July 2015 at a surplus. The fair value of the land drop to RM10,000,000 on 30 June 2018, but was never recorded by the company. The land is not depreciated. The motor vehicles, and fixtures and fittings are depreciated on straight line basis at 10% per annum. 3. BFM Bhd has a farm in Betong area where they breed 300 1-year old and 400 1.5-year old dairy cattle. The amount of RM940,000 was the fair value less cost to sell as at 1 July 2018. On 1 January 2019, the company had 50 newbom cattlethat were valued at RM550 per newbom at fair value less cost to sell. On 30 June 2019, the fair value of the cattle (excluding newborn) was RM1,150,000. The fair value less cost to sell of a newborn and a 6-months old cattle were RM570 and RM670 respectively at that date. During the year, the related cost to sell a cattle was RM120. 4. A government grant was received 10 years ago after the company complied with condition on setting up the dairy cattle farm. The balance of the deferred income has yet to be amortised for another 5 years. 5. Included in the amount of intangible assets was a research carried out by the company on 1 February 2019 amounting RM14,000. 6. The interim dividend paid for the year included half year dividend for 5% cumulative preference shares. The finance cost represents interest on debentures. 7. The tax expense for the year was RM542,000. Blue Farming and Milk Industry Bhd (BFM Bhd) is a public listed company established in 2000. The company was incorporated in Malaysia, involved in dairy farming, manufacturing and distributing of dairy products. The following balances are for the year ended 30 June 2019. Note Dr RM'000 Cr RM'000 25,000 2 2 1 1 11,800 6,020 1,200 265 11,000 32,000 5,200 4,050 18,100 2,640 628 750 1 2 1 Sales Cost of sales Administration expenses Selling and distribution expenses Finance costs Land (at revaluation) Buildings (at revaluation) Equipment Machine A Machine B Motor vehicles Fixtures and fittings Goodwill Accumulated depreciation as at 1 July 2018: Buildings Equipment Machine A Machine B Motor vehicles Fixtures and fittings Biological assets Investment properties Investments Intangible assets Tax paid Accounts receivable Inventories Bank balances Ordinary shares 5% Cumulative preference shares Retained profits Revaluation reserve (land) 8% Debentures 1 3,840 988 770 1,905 792 251 3 5 940 4,000 2.100 794 277 2,320 510 447 45,000 10,000 9,280 450 5,000 2 2 4 Deferred income Accounts payable Accruals Interim dividend 300 1,760 230 6 525 105,566 105,566 The following notes are related to the balances given above: 1. On 1 July 2016, BFM Bhd acquired King Manufactures Sdn Bhd. During the acquisition, the equipment and machine A were revalued at RM5,200,000 and RM4,050,000 respectively. The agreed purchase consideration for the assets was RM10,000,000. The goodwill is derived from the acquisition. Some technical problems had caused both assets to be less productive during the financial year ended 30 June 2018. As at 30 June 2018, it was estimated that the expected value in use amounted to RM7,000,000. BFM Bhd determined that if the equipment and machine A were to be sold, the market value would be RM7,200,000. The cost to sell them was estimated at 5.5% of the fair value. For the financial year ended 30 June 2019, BFM Bhdhad conducted a major inspection on the equipment and machine A. The company also did some intensive technical adjustment to improve the capacity of the plants. Due to this reason, it was expected that the value in use would be increased by 5% as compared to the year ended 30 June 2018 projection and the net selling price was estimated to be RM7,200,000. It is the company's policy to depreciate equipment and machinesat 10% on carrying amount. Machine A has a salvage value of RM50,000. The depreciations of equipment and machines are part of cost of sales. Goodwill has indefinite useful life. 2. The building was revalued for the first time on 1 July 2015 where the revaluation result in a deficit of RM150,000. The remaining useful life of the building for on 1 July 2015 was 25 years. The building was revalued on 1 July 2018 at RM32,500,000. The land was also revalued for the first time on 1 July 2015 at a surplus. The fair value of the land drop to RM10,000,000 on 30 June 2018, but was never recorded by the company. The land is not depreciated. The motor vehicles, and fixtures and fittings are depreciated on straight line basis at 10% per annum. 3. BFM Bhd has a farm in Betong area where they breed 300 1-year old and 400 1.5-year old dairy cattle. The amount of RM940,000 was the fair value less cost to sell as at 1 July 2018. On 1 January 2019, the company had 50 newbom cattlethat were valued at RM550 per newbom at fair value less cost to sell. On 30 June 2019, the fair value of the cattle (excluding newborn) was RM1,150,000. The fair value less cost to sell of a newborn and a 6-months old cattle were RM570 and RM670 respectively at that date. During the year, the related cost to sell a cattle was RM120. 4. A government grant was received 10 years ago after the company complied with condition on setting up the dairy cattle farm. The balance of the deferred income has yet to be amortised for another 5 years. 5. Included in the amount of intangible assets was a research carried out by the company on 1 February 2019 amounting RM14,000. 6. The interim dividend paid for the year included half year dividend for 5% cumulative preference shares. The finance cost represents interest on debentures. 7. The tax expense for the year was RM542,000