IAS36 Impairment of Assets was issued in June 1998 and subsequently revised in March 2004 and January 2008. Its main objective is to prescribe the procedures that should ensure that an entity's assets are carried at no more than their recoverable amounts. Where an asset is carried at an amount in excess of its recoverable amount, it is said to be impaired and IAS36 requires an impairment loss to be recognised. 

Wilderness owns and operates an item of plant that cost £640,000 and had accumulated depreciation of £400,000 at 1 October 2017. It is being depreciated at 12.5% on cost. On 1 April 2018 (exactly half way through the year) the plant was damaged when a factory vehicle collided into it. Due to the unavailability of replacement parts, it is not possible to repair the plant, but it still operates, albeit at a reduced capacity. Also it is expected that as a result of the damage the remaining life of the plant from the date of the damage will be only two years. 

Based on its reduced capacity, the estimated present value of the plant in use is £150,000. The plant has a current disposal value of £20,000 (which will be nil in two years' time), but Wilderness has been offered a trade-in value of £180,000 against a replacement machine which has a cost of £1 million (there would be no disposal costs for the replaced plant). Wilderness is reluctant to replace the plant as it is worried about the long-term demand for the product produced by the plant. The trade-in value is only available if the plant is replaced.

Required:

(a) Define an impairment loss, explaining the relevance of an asset's fair value less costs of disposal and its value in use. State how frequently assets should be tested for impairment.
(b) Explain how an impairment loss is accounted for after it has been calculated.
(c) Prepare extracts from the financial statements of Wilderness in respect of the plant for the year ended 30 September 2018. Your answer should explain how you arrived at your figures.