it is noed in this question the new investment in Sitin (cost) should be 13m, raising the impairment loss of 3m (16m-13m). i think the entry should be recorded as follow: Dr: RE (Grange) CR:investment in Sitin The impairment loss test demonstrates this point: 862+2-7+4-3(impairment)=858 858-830=28 impairment loss. Dr:RE (Grange) Cr:PPE I wonder why 3m of impairment loss is excluded in calculation of RE of Grange. The calculaion of RE only deduct the 28m impairment loss.