On 1 April 2021 the construction of a fixed oil platform is completed and ready for use at a total cost of $500 million. The useful life of the rig is linked to the 25-year exploration rights granted to the company. Due to the specific nature of the platform it is deemed to have no realisable value (other than minimal scrap value) at any stage throughout its life. All impairment tests are therefore based on value-in-use estimations.

On 30 June 2023 a rapid and significant decline in world oil prices has provided an indication that the asset may be impaired. On this date, the rig’s value in use is estimated to be $414 million.

On 30 June 2024 a major contract was cancelled after one of the company’s customers was declared bankrupt. This led directors to believe the value in use of the rig was now $374 million.

Required 

Prepare the necessary journal entries to record adjustments for impairment on 30 June 2023 and 30 June 2024.