Meow Plc has two investments. One, an investment in listed shares, is available for sale as a financial asset. The current market value is 405,000 but the shares were bought for 675,000. The other is an investment in a three year bond with an amortised cost of 450,000 with a stated and effective interest rate of 7% (current market rates are 10%). After two years Meow Plc is not expecting to receive the last years interest and expects to receive only 2/3 of the principal.

(d) Meow Plc has two investments. One, an investment in listed shares, is available for sale as a financial asset. The current market value is 405,000 but the shares were bought for 675,000. The other is an investment in a three year bond with an amortised cost of 450,000 with a stated and effective interest rate of 7% (current market rates are 10%). After two years Meow Plc is not expecting to receive the last year's interest and expects to receive only 2/3 of the principal. Required What is impairment? What impairment should be recorded in the accounts of Meow Plc for the listed shares and the three year bond? (7 marks)