An advertising agency holds an acquired customer list, measured under the cost model, with a carrying amount of 640,000. The departure of several major advertisers leads to a test under IAS 36, which gives a recoverable amount of 500,000. 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. The entity uses an accumulated impairment account. Record the year-end entry.
- Carrying amount of the list
- 640,000
- Recoverable amount under IAS 36
- 500,000