Question – Impairment of Asset FE Land Bhd is in manufacturing industry, producing electrical and electronic products. The company has assets located at its main operating area in Klang Valley. It uses cost model to record its assets as per MERS116. The company has been producing 12 to 40 inches televisions, and smartphones. Towards the end of 20x3 the company discovers that there are indications that some of the assets' carrying amounts may be impaired. The company tests for impairment and derives at the following details: Carrying amount as at Fair value less Value in use 31 Dec 20x3 before cost to sell impairment Assets RM'000 RM'000 RM'000 Property 40,000 37,000 34,000 Plant 50,000 54,000 57,000 Equipment 36,000 Not determinable 32,000 Total 126,000 At the end of 20x5, the assets are tested for reversal of impairment losses since there are indications that the previous impairment losses may have been reversed. Depreciations are provided using the straight line basis. The followings are the details: Remaining useful life Recoverable amount as at 31 as at 31 Dec 20x3 Dec 20x5 Assets Years RM'000 Property 40 43,250 Plant 25 50,000 Equipment 10 30,000 Total Required: Compute the impairment losses and reversals of impairment losses, if any and show journal entries of the transactions. (15 Marks)

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