Impairment IAS 36

Q2. A Co holds an item of machinery which it believes is impaired. The following information is relevant:

The machine is held at historical cost

The carrying amount of the machinery is GHS10, 500

The fair value of the machinery is GHS 10,000, the cost of selling is GHS 500

The value in use of the machinery is estimated to be GHS 9,000

Required:

Determine whether the machinery is impaired and if so, calculate the impairment loss. The asset has never been previously revalued.