A ferry company amortises on a straight-line basis over 6 years, with no residual value, a ticketing system acquired for 900,000 and measured under the cost model. At the start of the year, accumulated amortisation amounts to 300,000. At the year-end, following the loss of a sea route, a test under IAS 36 gives a recoverable amount of 390,000. 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. Record the charge for the year, then the impairment entry.
- Cost of the system
- 900,000
- Useful life
- 6
- Accumulated amortisation at the start of the year
- 300,000
- Recoverable amount under IAS 36
- 390,000