A solar panel manufacturer acquired a patent on an anti-reflective coating for 720,000, amortised on a straight-line basis over 8 years with no residual value. After 3 years of amortisation, the emergence of a more efficient competing technology leads to a test under IAS 36, which shows a recoverable amount of 345,000. No impairment loss has been recognised so far. 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 patent
- 720,000
- Useful life
- 8
- Years amortised
- 3
- Recoverable amount under IAS 36
- 345,000