Chadwick Enterprises, Inc. operates restaurants throughout the Midwest. Three of its restaurants located in the center of a large urban area have experienced declining profits due to declinng population. The company's management has decided to test the assets of the restaurants for possible impairment. the relevant information for these assets is presented below.

Book Value $6.5 million

Estimated undiscounted sum of future cash flows $4.0 million

Fair value $3.5 million

Required:

1. Determine the amount of impairment loss, if any

2. Repeat requirement 1 assuming that the estimated undiscounted sum of future cash flows is $6.8 million and fair value is $5 million.

***Consider IFRS

Part two

Refer to situation above^

Required:

How mights your solution differ is Chawick Enterprises, Inc. prepares financial statements according to IFRS? Assume that the fair value amount given in the excercise equals both (a) the fair value less costs to sell and (b) the present value of estimated future cash flows.