Log Incorporated, a public company following IFRS, has a machine that processes and packages tuna in oil. The machine originally cost $100,000 and is being amortized on a straight-line basis over 20 years. The carrying amount of the machine on December 31, 2020, is $20,000. Recent health studies have shown that due to contamination, eating tuna is bad for your health. Undiscounted cash flows for the machine are $22,000. Discounted cash flows for the machine are $17,000. The fair value is estimated to be $17,500 and disposal costs of the machine are estimated to be $1,000.

Required:

1. Is the machine impaired? What is the impairment loss if any? (2 marks)

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2. Provide the journal entry if there is impairment. (2 marks)

	Debit	Credit

3. Assume instead that Log Incorporated is a private company, following ASPE, is the machine impaired? Explain your answer and if there is impairment, what is the amount of the impairment loss? (2 marks)