ANSWER ALL PARTS OF THIS QUESTION a) The following is an extract from the balance sheet of NEP plc for the fiscal year ended 31 December 2020: (in thousands) Non-current assets Property, plant and equipment (PPE) Intangible assets Financial assets 748 299 371 Current assets Inventories Trade receivables Cash 160 95 202 Total assets 1,875 During the annual press conference, a journalist asks the CEO of NEP whether specific positions in the balance sheet changed materially in value compared to the previous fiscal year. The CEO responds with: Across all asset categories, impairments amount to 155,000 in fiscal year 2020." REQUIRED: i) Explain which asset positions in the above extract are subject to impairment and which IFRS applies to each of these asset positions. ii) Put yourself in the shoes of the journalist. Does the CEO's statement answer the question? [10 marks] b) Among its items of property, plant and equipment (PPE), NEP plc has a machine. On 31 December 2021, there is an indication that the machine may be impaired. The chief accountant has collected the following information: On 31 December 2020, the carrying amount of the machine was 197,000. For fiscal year 2021, depreciation amounts to 43,000. The machine is measured according to the cost model. On 31 December 2021, the fair value of the machine is 140,000. The sale of the machine would involve costs of 26,000 to remove the machine from its current location. Future cash inflows expected from using the machine are 40,000 in each of the years 2022, 2023 and 2024; 2024 is the end of the machine's useful life. Future cash inflows do not include the residual value. The residual value of the machine is 20,000. The relevant discount rate is 9%. REQUIRED: i) Conduct the impairment test for the machine on 31 December 2021. Calculate all relevant amounts and, if applicable, prepare the relevant journal entries. Explain each of your steps. ii) Throughout the year 2021, PHI plc does not acquire or dispose of any item of PPE. On 31 December 2021, annual depreciation for PPE items other than the machine amounts to 134,000. Based on the balance sheet extract from a), derive the value of PPE on 31 December 2021. Note that the balance sheet includes net PPE, i.e., PPE after accounting for accumulated depreciation. Explain your steps. iii) Assume that the machine is not measured according to the cost model but accord- ing to the revaluation model. Explain the accounting treatment of impairments for revalued assets and how it differs from the accounting treatment of impairments for assets measured according to the cost model. You do not have to provide cal- culations or journal entries. [15 marks) TOTAL 25 MARKS