Entity A owns a plant that was originally purchased for$4,500,000.On31 Dec 2019, the plant has been revalued to$6,000,000with the revaluation of$3,000,000being recognised as other comprehensive income and recorded in the revaluation reserve as a surplus.

On31 Dec 2020, the plant has a carrying amount of$5,000,000but the recoverable amount of the plant has just been estimated at only$1,500,000.

REQUIRED:

According to the accounting standards, prepare the relevant journal entries related to the impairment loss on31 Dec 2020.

ACCOUNTS FOR INPUT:

| Plant | Motor van | Machine | Land | Building | Bank | Payable | Receivable | No entry |

| Retained earnings|Other income |Other expense |Interest expense | Interest revenue |

| Depreciation |Accum. depreciation | Impairment loss | Reversal of impairment loss |

| Restoration liability |Loss on disposal |Gain on disposal | Revaluation surplus | Revaluation deficit |

ANSWERS:

Journal Entries: