Kervanor Composites: the Nacelles line press, from commissioning to the reversal of an impairment loss

In N, Kervanor Composites sets up a "Nacelles" production line: a PX-40 hot moulding press, bought from the manufacturer Talvenne Industrie (a fictitious entity), and an RD-8 trimming robot. The panels are sold to Veltrane Aviation (a fictitious entity). You follow the press over three years: initial cost, components and depreciation in N; impairment indicator, cash-generating unit and impairment test in N+1; revised depreciation, capped reversal of the impairment loss and note in N+2. All figures are case data; teaching assumptions and professional judgements are flagged as such. Teaching assumptions: VAT is fully recoverable; discount factors are rounded to four decimals and amounts to the euro; for simplicity, the site's corporate assets (buildings, central systems) are left outside the scope of the case (their treatment under IAS 36 is not studied here); no method, useful life or rate chosen by Kervanor is required by the standards.

Standard involved: IAS 16 Property, Plant and Equipment (initial cost). The press has just been delivered, installed and tested. Read the two documents, sort the expenditures, calculate the cost of the press and record the acquisition entry.