Exercise 3-02 b-c (Essay) Killroy Company owns a trade name that was purchased in an acquisition of McClellan Company. The trade name has a book value of $3.5 million, but according to IFRS, it is assessed for impairment on an annual basis. To perform this impairment test, Killroy must estimate the fair value of the trade name (using IFRS 13). It has developed the following cash flow estimates related to the trade name based on internal information. Each cash flow estimate reflects Killroy's estimate of annual cash flows over the next eight years. The trade name is assumed to have no salvage value after the eight years. (Assume the cash flows occur at the end of each year.) Cash Flow Estimate $380,000 630,000 750,000 Probability Assessment 20 % 50 % 30 % Killroy determines that the appropriate discount rate for this estimation is 8%. Is the estimate developed for the trade name level 1, level 2 or level 3 fair value estimate? Explain. LINK TO TEXT Draft a short note to the financial statements noting any sources of measurement uncertainty. Exercise 3-02 b-c (Essay) Killroy Company owns a trade name that was purchased in an acquisition of McClellan Company. The trade name has a book value of $3.5 million, but according to IFRS, it is assessed for impairment on an annual basis. To perform this impairment test, Killroy must estimate the fair value of the trade name (using IFRS 13). It has developed the following cash flow estimates related to the trade name based on internal information. Each cash flow estimate reflects Killroy's estimate of annual cash flows over the next eight years. The trade name is assumed to have no salvage value after the eight years. (Assume the cash flows occur at the end of each year.) Cash Flow Estimate $380,000 630,000 750,000 Probability Assessment 20 % 50 % 30 % Killroy determines that the appropriate discount rate for this estimation is 8%. Is the estimate developed for the trade name level 1, level 2 or level 3 fair value estimate? Explain. LINK TO TEXT Draft a short note to the financial statements noting any sources of measurement uncertainty