Stay Dry Raincoats uses three different machines (A, B, and
C)to manufacture raincoats. These machines are considered to be a cash generating unit (CGU). Due to climate change and changes in consumer preferences, demand for raincoats has declined in recent years. The following information is relevant to the evaluation of impairment.

\begin{array}{c}\begin{array}{|l}\hline \text { } \\\hline \text { Net carrying value} \\\hline \text { Fair value less costs to sell} \\\hline \text { Value in use } \\\hline\end{array}\begin{array}{|r|}\hline\mathrm{A} \\\hline 800,000 \\\hline 1,000,000 \\\hline \text { NA } \\\hline\end{array}\begin{array}{r}\hline\mathrm{B} \\\hline 1,430,000 \\\hline 1,330,000 \\\hline \text { NA }\\\hline\end{array}\begin{array}{|r|}\hline\mathrm{C} \\\hline 1,170,000 \\\hline 670,000 \\\hline \text { NA }\\\hline\end{array}\begin{array}{r|}\hline\text { Total } \\\hline 3,400,000 \\\hline 3,000,000 \\\hline 2,700,000\\\hline\end{array}\end{array}

Required:
Determine the amount of impairment loss that should be recorded for the cash generating unit and for each of the three machines.

Which Statement Is Correct

Multiple Choice

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