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ThefinancialcontrollerofABLtdhasidentifiedamatterbelowwhichmayindicatean impairmentloss: ABLtdoperatesaplantwhichhasacostofSh.1,280,000andaccumulateddepreciationof Sh.800,000at1January2013.Onthisdatetheplantwasdamagedbecauseofcollusionwitha factoryvehicle.TheentityestimatedthatpresentvalueoftheplantinuseisSh.300,000andit hasacurrentdisposalvalueofSh.40,000. Required i. Calculateimpairmentlossonthecompany'splantifany (6Marks) ii. Forpurposesofaccountingdifferentiatebetweenresearchanddevelopmentcosts (2Marks)

ThefinancialcontrollerofABLtdhasidentifiedamatterbelowwhichmayindicatean

impairmentloss:

ABLtdoperatesaplantwhichhasacostofSh.1,280,000andaccumulateddepreciationof

Sh.800,000at1January2013.Onthisdatetheplantwasdamagedbecauseofcollusionwitha

factoryvehicle.TheentityestimatedthatpresentvalueoftheplantinuseisSh.300,000andit

hasacurrentdisposalvalueofSh.40,000.

Required

i.

Calculateimpairmentlossonthecompany'splantifany

(6Marks)

ii.

Forpurposesofaccountingdifferentiatebetweenresearchanddevelopmentcosts

(2Marks)

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