(ii) Oracle Plc owned100% of the equity share capital of Red Plc, a wholly owned subsidiary. The assets at the reporting date of Red Plc were as follows:

000

Goodwill 2,400

Buildings 6,000

Plant and equipment 5,200

Other intangibles (patent) 2,000

Receivables and cash 1,400

Total 17,000

On the reporting date a fire within one of Reds buildings led to an impairment review being carried out.

The recoverable amount of the business was determined to be 9.8 million. The fire destroyed some plant and equipment with a carrying value of 1.2 million and there was no option but to scrap it. The other intangibles consist of a licence to operate Reds plant and equipment.

Following the scrapping of some of the plant and equipment a competitor offered to purchase the patent for 1.5 million. The receivables and cash are both stated at their realisable value and do not require impairment.

Required: Show how the impairment loss in Red is allocated amongst the assets. Show all your workings.