A.Goodwill

Harry Corporation purchased a division five years ago for $ 3 million.The division has been identified as a reporting unit that is cash-generating. Management is reviewing the division for impairment of goodwill and has estimated the fair value of the reporting unit to be $ 3.2 million and the unit's value in use to be $ 3.3 million.In addition, there would be $ 75,000 in direct costs should the company decide to sell. The carrying amounts of the division's net assets, including the associated goodwill of $ 1,350,000, are listed below.

Carrying Amount of Net Assets Including Goodwill

Cash

$ 300,000

Receivables

350,000

Inventory

1,050,000

Property, plant, and equipment (net)

1,200,000

Goodwill

1,350,000

Less: Accounts and notes payable

(750,000)

Net assets, at carrying amounts

$ 3,500,000

Instructions

Determine if goodwill is impaired and provide the related journal entries, if any, under both ASPE and IFRS. (5 points)