The following is net asset information related to the Ting Division of Santana Ltd.

                                    Ting Division
                                       Net Assets
                            As of December 31, 2022
                                    (in millions)
Property, plant, and equipment (net) .................... HK$2,600
Goodwill ................................................................................ 200
Accounts receivable ............................................................ 200
Cash ........................................................................................ 60
Less: Notes payable ............................................................ (2,700)
Net assets ........................................................................ HK$ 360

The purpose of the Ting Division (cash-generating unit) is to develop a nuclear-powered aircraft. If successful, traveling delays associated with refueling could be substantially reduced. Many other benefits would also occur. To date, management has not had much success and is deciding whether a write-down at this time is appropriate.

Management estimated its future net cash flows from the project to be HK$400 million. Management has also received an offer to purchase the division for HK$335 million (fair value less costs to sell). All identifiable assets’ and liabilities’ book and fair value amounts are the same.

Instructions

a. Prepare the journal entry (if any) to record the impairment at December 31, 2022.

b. At December 31, 2023, it is estimated that the division’s recoverable amount increased to HK$345 million. Prepare the journal entry (if any) to record this increase in fair value.