On April 2017 Palace acquired 100% of the share capital of Roomes, whose only activity is the extraction and sale of spa water. Roomes had been profitable since its acquisition, but bad publicity resulting from several consumers becoming ill due to contamination of the spa water supply in April 2018 has led to unexpected tosses in the last six months. The carrying amounts of Roomes's assets at September 30, 2018 are: Brand (Szav -- see below) Land containing spa Purifying and bottling plant Inventories S000 7,000 12,000 8,000 5,000 32,000 The source of the contamination was found and it has now ceased. The company originally sold the bottled water under the brand name of Szav but because of the contamination it has rebranded its bottled water as Moon. After a large advertising campaign sales are now starting to recover and are approaching previous levels. The value of the brand in the statement of financial position is the depreciated amount of the original brand name of Szav. The directors have acknowledged that $1.5 million will have to be spent in the first three months of the next accounting period to upgrade the purifying and bottling plant. Inventories contain some old Szav bottled water at a cost of $2 million; the remaining inventories are labeled with the new brand Pure. Samples of all bottled water have been tested by the health authority and have been passed as fit to sell. The old bottled water will have to be relabeled at a cost of $250,000 but is then expected to be sold at the normal selling price of (normal) cost plus 50%. Based on the estimated future cash flows, the directors have estimated that the value in use of Roomes at September 30, 2018 calculated according to the guidance in IAS 36 is $20 million. There is no reliable estimate of the fair value less cost to sell of Roomes. On April 2017 Palace acquired 100% of the share capital of Roomes, whose only activity is the extraction and sale of spa water. Roomes had been profitable since its acquisition, but bad publicity resulting from several consumers becoming ill due to contamination of the spa water supply in April 2018 has led to unexpected tosses in the last six months. The carrying amounts of Roomes's assets at September 30, 2018 are: Brand (Szav -- see below) Land containing spa Purifying and bottling plant Inventories S000 7,000 12,000 8,000 5,000 32,000 The source of the contamination was found and it has now ceased. The company originally sold the bottled water under the brand name of Szav but because of the contamination it has rebranded its bottled water as Moon. After a large advertising campaign sales are now starting to recover and are approaching previous levels. The value of the brand in the statement of financial position is the depreciated amount of the original brand name of Szav. The directors have acknowledged that $1.5 million will have to be spent in the first three months of the next accounting period to upgrade the purifying and bottling plant. Inventories contain some old Szav bottled water at a cost of $2 million; the remaining inventories are labeled with the new brand Pure. Samples of all bottled water have been tested by the health authority and have been passed as fit to sell. The old bottled water will have to be relabeled at a cost of $250,000 but is then expected to be sold at the normal selling price of (normal) cost plus 50%. Based on the estimated future cash flows, the directors have estimated that the value in use of Roomes at September 30, 2018 calculated according to the guidance in IAS 36 is $20 million. There is no reliable estimate of the fair value less cost to sell of Roomes