Inland Ports Ltd (IPL) operates several land-based container facilities around New Zealand. IPL has determined that its facility in Taupo is a Cash-Generating Unit (CGU). IPL refers to this Taupo facility as CGU-Taup.

Since the completion of the Taupo bypass, there has been a slow-down in demand for inland port services in the Taupo area. In response, IPL has revised its forecasts downwards for the foreseeable future. Based on these forecasts, IPL has determined the Value in Use of CGU-Taup at the end of the 2018 financial year to be $400,000. The fair value of CGU-Taupo is $410,000 before allowing for $12,000 of costs of disposal.

The carrying amount of the assets that comprise CGU-Taup are as follows:

CGU-Taup $

Carrying amount of assets at end of the 2018 financial year:

Buildings (at cost) 350,000

Accumulated depreciation building (110,000)

Factory machinery (at cost) 230,000

Accumulated depreciation machine (50,000)

Goodwill (net of previous impairment of $20,000) 80,000

500,000

REQUIRED: Determine the appropriate accounting treatment for the CGU-Taup as at the end of the 2018

financial year. Show all your workings, and provide all necessary journal entries, with

appropriate narration(s). Ignore any tax implications.