Cactus Corporation is a manufacturer of automobile parts. It has one cash-generating unit that needs to be tested for impairment. In addition, there is a cash-generating unit that requires testing for impairment with the following carrying value information available:

Land $320,000

Building 870,000

Equipment 410,000

Goodwill 300,000

The only separately determinable fair value available from the cash-generating unit is the land which has a fair value of $380,000. The fair value of the entire CGU is $1,550,000. The cash flows generated by the CGU for the next 5 years would be $317,000 per year. The cost to sell would be 5% of fair value and the appropriate discount rate is 6%.

Required:

a) Assuming Cactus is a corporation that reports under IFRS, calculate the impairment loss, if any, at December 31, 2018. For the CGU, allocate the impairment loss, if any to the CGUs assets. (6 marks)

b) Assuming that Cactus is a private entity reporting under ASPE, calculate the impairment loss if any on the asset (2 mark).