On January 20X1, Big Music acquired all the assets of Outhere which operates in three different continents. The purchase price of 20 million could be allocated as follows:

Purchase Price Carrying amount of assets* Goodwill

Europe 10.000.000 7.000.000 3.000.000

Asia 4.000.000 3.000.000 1.000.000

Africa 6.000.000 4.000.000 2.000.000

20.000.000 14.000.000 6.000.000

*assets other than goodwill

During 20X4 there was a severe drought throughout Africa and the production of the Africa cash generating unit decreased by 70%. Management determined the recoverable amount of the Africa operations to be 1.500.000 on 31 December 20X4. Accumulated impairment losses in respect of goodwill on Africa operations amount up to 800.000 on 31 December 20X3.

By 20X7 the region has had adequate rainfall to relieve the drought conditions, and it is estimated that production would again increase with approximately 50%.

All assets are depreciated over a period of 10 years on a straight-line basis.

Required:

1. Calculate the impairment loss for the Africa continent for the year ended 31 December 20X4 and indicate how it will be allocated.
2. Calculate the reversal of the impairment loss for the Africa continent for the year ended 31 December 20X7, if the recoverable amount is 1.600.000.
3. Calculate the reversal of the impairment loss for the Africa continent for the year ended 31 December 20X7, if the recoverable amount is 1.000.000.