Question
Green Gables Ltd. (Green Gables) has substantial land and buildings in Timmins, Ontario, where it operates a grocery store. Diana is preparing the year end
Green Gables Ltd. (Green Gables) has substantial land and buildings in Timmins, Ontario, where it operates a grocery store. Diana is preparing the year end financial statements for Green Gables and is concerned that impairment testing should be done on the building used for the grocery store. Year end information related to the building is as follows: Building $200,000 Accumulated depreciation ($50,000) Additional information was gathered by Diana on the future cash flows and fair value of the asset: Undiscounted future cash flows from building $140,000 Value in use $130,000 Fair value $135,000 Costs of disposal ($4,000)
Required: Prepare the impairment journal entries (if any) under both IFRS and ASPE.
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