Mikkeli OY acquired a brand name with an indefinite life in 2020 for 40,900 markkas. At December 31, 2020, the brand name could be sold for 37,100 markkas, with zero costs to sell. Expected cash flows from the continued use of the brand are 43,070 markkas, and the present value of this amount is 36,100 markkas.

Assume that Mikkeli OY is a foreign company using IFRS and is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare consolidated financial statements. Ignore income taxes.

Required:

1. Prepare journal entries for this brand name for the year ending December 31, 2020, under (1) IFRS and (2) U.S. GAAP.

Required A

1. Record the entry for the loss on impairment of brand as per IFRS.
2. Record the entry for the loss on impairment of brand as per IFRS.

Prepare the entry(ies) that the U.S. parent would make on the December 31, 2020 conversion worksheet to convert IFRS balances to U.S. GAAP. What entry(ies), if any, would be made at 12/31/21, assuming that the Brand has suffered no further impairment in 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Required B

1. Record the conversion entry needed for 12/31/20.
2. Record the conversion entry needed for 12/31/21.