E12.21 (LO 8, 10) (Goodwill Impairment) The following is net asset information for the Dhillon Division of Klaus Inc.:

Net Assets As at December 31, 2020 (in millions)
		Book Value		Fair Value Excluding Goodwill
Cash		$50		$50
Accounts receivable		216		216
Property, plant, and equipment (net)		2,618		2,760
Goodwill		206
Less: Notes payable		(2,700)		(2,700)
Net assets		$390

The purpose of the Dhillon Division (also identified as a reporting unit or cash-generating unit) is to develop a nuclear-powered aircraft. If successful, travelling delays that are associated with refuelling could be greatly reduced, and operational efficiency would increase significantly.

To date, management has not had much success and is deciding whether a writedown is appropriate at this time. Management has prepared the following estimates for the reporting unit or cash-generating unit:

• 1. Undiscounted future net cash flows are approximately $400 million.
• 2. Future value in use is approximately $385 million.
• 3. Sale of the unit would yield $346 million and selling costs would total $5 million.

Instructions

a. Under ASPE, determine if there is any impairment and prepare any necessary entry on December 31, 2020.

b. On December 31, 2021, it is estimated that the reporting unit's fair value has increased to $400 million. Under ASPE, prepare the journal entry, if any, to record the increase in fair value.

c. Under IFRS, determine if there is any impairment and prepare any necessary entry on December 31, 2020.

d. On December 31, 2021, it is estimated that the cash-generating unit's fair value has increased to $400 million. Under IFRS, prepare the journal entry, if any, to record the increase in fair value.