Mini Exercises – Non current assets – Question 6

Dear Sir,

I am unable to follow how the figures and journal entries in the answer for the below part:

The brand in the trial balance relates to a product line that received bad publicity during the year which led to falling sales revenues. An impairment review was conducted on 1 April 2009 which concluded that, based on estimated future sales, the brand had a value in use
of $12 million and a remaining life of only three years. However, on the same date as the impairment review, the company received an offer to purchase the brand for $15 million. Prior to the impairment review, it was being depreciated using the straight-line method over
a 10-year life.

Thanks for your help.

Regards,
Nitin