On 30 June 2017, an item of machinery had a carrying amount of $420,000 (current depreciation for the year has been provided).

The machinerys cost at acquisition was $600,000 at which time its estimated useful life was 10 years with no residual value.

On 30 June 2017, the same item of machinery was assessed as having a recoverable amount of $350,000 with a remaining useful life of 7 years.

On 30 June 2020, the machinery was assessed as having a recoverable amount of $260,000 and a remaining useful life of 4 years.

All machinery is carried under the cost model. On 30 June 2020, the firm should recognise:

a) $0 of impairment reversal b) an impairment loss of $10,000 c) an impairment reversal of $20,000 d) an impairment reversal of $60,000 e) an impairment reversal of $40,000

and why?