On January 2, 2015, Q. Tong Inc. purchased equipment with a cost of HK$10,440,000, a useful life of 10 years and no salvage value. The company uses straight-line depreciation. At December 31, 2015 and December 31, 2016, the company determines that impairment indicators are present. The following information is available for impairment testing at each year-end:

12/31/2015 12/31/2016

Fair value less costs to sell HK$9,315,000 Hk$8,850,000

Value-in-use HK$9,350,000 HK$8,915,000

There is no change in the assets useful life or salvage value. The 2016 income statement will report

		no Impairment Loss or Recovery of Impairment Loss.
		Impairment Loss of HK$435,000.
		Recovery of Impairment Loss of HK$40,889.
		Recovery of Impairment Loss of HK$603,889.