As of 31 December 2014, Lionel King Manufacturing Limited (LKM) recognized
an impairment loss of $400,000 on its delivery trucks with a cost of $1 million
and accumulated depreciation of $200,000 up to that date.
The original estimated useful lives of the trucks were 10 years and no revision
on the useful lives was made at the end of 2014. Straight-line depreciation basis
was adopted.
As of 31 December 2016, LKM forecasted that the cash inflows from the
delivery trucks would increase significantly. The value in use of the trucks would
be $700,000 on that date.
Determine whether a reversal of impairment loss can be recognized, and the
amount of reversal.