Ltd purchased a building on $1$ October $2021.$ The following costs were incurred:

Original purchase price R$4620000$

Admin and overhead R $225000$

Transfer$/$Legal fees $300000$

The building had a residual value of R$400000$ and an estimated useful life of $20$ years

On $31$ December $2021,$ the fair value was R$445000,$ costs to sell R$100000$ and restructuring costs R$125000$ and the

value in use was R$425000.$

Assume a tax rate of $28\%$

REQUIRED: Calculate the impairent loss for the year ended $31$ December $2021$

$3\mathrm{.}2$ Prepare the journal for the impairment loss and tax implications, for the impairment loss as identified in $3\mathrm{.}1$

$(5$ marks$)$

$3\mathrm{.}3$ Taking into consideration the impairment of assets, what is the indicator review and what factors the indicator review

depends on$?$ Briefly discuss

$(5$ marks$)$

$3\mathrm{.}4$ The relevant cash flows are those cash inflows and outflows that can be directly linked to the use of an asset or

cash generating unit. To establish these cash flows, discuss what factors need to be considered?

$(4$ marks$)$

QUESTION $4$

$(20$ Marks$)$