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Flex Corp., a mining company, owns a significant mineral deposit in a northern territory. Diamond prepares financial statements in accordance with IFRS. Included in the

Flex Corp., a mining company, owns a significant mineral deposit in a northern territory. Diamond prepares financial statements in accordance with IFRS. Included in the asset is a road system that was constructed to give company personnel access to the mineral deposit for maintenance and mining activity. The road system cannot be sold separately, and separate cash flow information is not available for it. The carrying amounts of two cash-generating units of the mine at June 30, 2020, are as follows: Machinery $4,000,000 Mine in the development phase $9,500,000 The machinery's value in use has been assessed at $4,500,000 while the fair value less costs to sell is $3,800,000. With respect to the mine, the value in use is $9,000,000 while fair value less costs to sell is $9,350,000.

(a) How should the road system's recoverable amount be determined?

(b) Determine if the machinery and the mine are impaired and prepare the journal entries, if any, to record the impairment at June 30, 2020.

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