Question
On August 31, 20X8, Gamma Corp. decided to sell its retail division. Upon review of the relevant facts, Gamma decided to account for this division
On August 31, 20X8, Gamma Corp. decided to sell its retail division. Upon review of the relevant facts, Gamma decided to account for this division as a discontinued operation. After the asset group was listed for sale, a broker was able to source an offshore buyer for the unit, and on October 31, 20X8, Gamma received a binding offer. Gamma agreed to pay a higher-than-expected sales commission due to the unique nature of the offer. Gamma prepares monthly financial statements and reports its financial results in accordance with IFRS.
August 31, 20X8
Carrying amount $15,000,000
Fair value 15,400,000 Estimated costs to sell 300,000
October 31, 20X8
Fair value (binding offer price) $15,500,000
Costs to sell (agreed-upon sales commission) 600,000
What amount of impairment loss (recovery), if any, should Gamma report on its October 31 financial statements?
a) ($200,000) b) $ 0 c) $100,000 d) $200,000
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