1. A company acquired a new high-tech printing press on January 1, 2011, for $80,000. At that time, the company estimated the press would have a five-year life and salvage value of $5,000. The company uses the straight-line depreciation method for all its equipment. In December 2012, a newer high-tech printing press is introduced in the market. The company controller is concerned that the value of the press may be impaired. The controller has provided you with the following data as of December 2012 and asked you to determine if there is any impairment using US GAAP or IFRS. If there is any impairment, please provide the journal entries.

Additionally, as part of the 2013 budget process, the controller has asked you to calculate depreciation expense of the press using both US GAAP and IFRS.

Expected future undiscounted cash flows from operating the press are $41,000.

Discounted net present value of expected cash flows from the press is $39,000.

Fair value of the press at December 31, 2012, is $35,000 and selling costs are minimal.

2. Use the same facts as problem 9 above, except assume that at December 31, 2013, the controller asks what, if any, impairment reserve can be reversed using US GAAP and IFRS, because the controller concludes the press is not impaired at December 31, 2013.