A licence to manufacture a generic medicine, acquired for 800,000 and measured under the cost model, has accumulated amortisation of 300,000 at the year-end. As a competitor has launched a cheaper product, the entity performs a test under IAS 36, which results in a recoverable amount of 380,000. Under IAS 36, when the recoverable amount is lower than the carrying amount, the difference is recognised as an impairment loss in profit or loss. Calculate the carrying amount before the test and the impairment loss.
- Cost of the licence
- 800,000
- Accumulated amortisation
- 300,000
- Recoverable amount under IAS 36
- 380,000