On December 31, 2020, a franchise that is owned by Horten Holdings Ltd. has a remaining life of thirty-two years and a carrying amount of $1,000,000. Management estimates the following information about the franchise:

Fair value 1,000,000 Disposal costs 45,000 Discounted cash flows (value in use) 1,100,000 Undiscounted future cash flows 1,200,000 Required:

a. Determine if the franchise was impaired at the end of 2020 and prepare the journal entry, if any, if Horten follows IFRS.

b. Assume now that the recoverable amount was $950,000. Prepare the journal entry for the impairment, if any (IFRS).

c. How would your answer in part

(a) change if the fair value at the end of 2020 was

$1.35M?

d. Assume the amounts used for part (a). How would your answers change for parts (a)

to (c), if the franchise was estimated to have an indefinite life and last into perpetuity

(IFRS)?

e. How would your answers change for parts

(a) to (c), if the company followed ASPE and an indication of impairment existed?

f. How would your answer change for part

(d) if the franchise was estimated to have an indefinite life and last into perpetuity (ASPE)?