Under IAS 36 Impairment of Assets, Okafor Steel Works Limited identified an item of plant with a carrying amount of ₦22,400,000. The estimated value in use is ₦19,800,000 and the fair value less costs of disposal is ₦20,500,000. What impairment loss, if any, should be recognised?

IAS 36 requires that an asset be written down to its recoverable amount, defined as the higher of value in use and fair value less costs of disposal. Recoverable amount = max(₦19,800,000; ₦20,500,000) = ₦20,500,000. Impairment loss = carrying amount − recoverable amount = ₦22,400,000 − ₦20,500,000 = ₦1,900,000. Option A incorrectly uses value in use as the recoverable amount, and option C sums both differences.