Riley had a Cash$-$generating unit which comprises the following assets:

Building $$700000$

Plant and equipment $$200000$

Goodwill $$90000$

Current Assets $$20000$

Total$$$$1010000$

One of the machines, carried at $$40,000,$ is damaged and will have to be scrapped. The

recoverable amount of cash$-$generating unit is estimated at $$7,50,000.$ What will be carrying

amount of the building after the impairment loss has been recognized? Also give interpretation of

your answer.

Riley acquired a non current asset on $1$ October $20$X$9$at a cost of $$100,000$ which had a useful life

of ten years and a nil residual value. The asset had been correctly depreciated upto $30$ Sep $20$Y$4.$

At that date the asset was damaged and an impairment review was performed. On $30$ Sep $20$Y$4$

the fair value of the assets less costs to sell was $ $30,000$ and the expected future cash flows were

$ $8,500$ per annum for the next $5$ years. The current cost of capital is $10\%$ and a five year annuity

of $$1$ per annum at $10\%$ would have a present value of $ $3\mathrm{.}79.$ What amount will be charged to

profit or loss for the impairment of this asset for the year ended $30$ Sep $20$Y$4?$