Question 1 A company has a machine in its statement of financial position at a carrying amount of GH300,000. The machine is used to manufacture the company's best-selling product range, but the entry of a new competitor to the market has severely affected sales. As a result, the company believes that the future sales of the product over the next three years will be only GH150,000, GH100,000 and GH50,000. The asset will then be sold for GH25,000. An offer has been received to buy the machine immediately for GH240,000, but the company would have to pay shipping costs of GH5,000. The risk-free market rate of interest is 10% Market changes indicate that the asset may be impaired and so the recoverable amount for the asset must be calculated. Required: In accordance with IAS 36, show the relevant calculation for impairment loss and how they will be treated in the financial statement. Question 2 An entity owns a property which was originally purchased for GH300,000. The property has been revalued to GH500,000 with the revaluation of GH200,000 being recognised as other comprehensive income and recorded in the revaluation reserve. The accumulated depreciation related to property after revaluation is GH40,000 and therefore its carrying amount is GH460,000 but the recoverable amount of the property has just been estimated at only GH200,000. The entity does not transfer incremental depreciation. Required: In accordance with IAS 36, show the amount of impairment and how should this be treated in the financial statements