In 2016 BigResearcher Company had a major breakthrough on a product development project for a

new robotic lawnmower. BigResearcher was able to patent the new robotic lawnmower allowing the

company an exclusive right to make and sell the product for 20 years. BigResearcher believed that

product demand would last for 10 years, and estimated that annual net cash flows from the robotic

lawnmower would be $3.5 million. To produce the robotic lawnmower, BigResearcher built an exclusive

fabricating plant for $12.3 million. Construction on the plant was completed in late December 2016 and

production began on January 1, 2017. Once BigResearcher no longer saw a market for the robotic

lawnmower, it planned to sell the plant and estimated the selling price at $1.5 million. BigResearcher

uses the straight-line method for depreciating all of its long-lived assets. On January 1, 2020,

BigResearchers major competitor announced that it had developed a product that would dramatically

reduce demand for the robotic lawnmower. As a result, BigResearcher believes the cash flows from sale

of the robotic lawnmower will be $1.5 million in 2020 and 2021, only, and that the selling price for the

fabrication plant at the end of 2021 would be $400,000. BigResearcher determined that the present

value of the revised future cash flows related to the robotic lawnmower is $2,933,884 and believes that

the fair value of the plant in early 2020 is approximately $5 million.

Assuming that BigResearcher has concluded that it must determine if an impairment loss has occurred,

complete the steps necessary to determine if an impairment exists, and if so, how much would be

recorded for the impairment loss.

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The impairment is $4,060,000 (using US GAAP), but I don't know how to get there?