On December 31, 2019, Armstrong realized that a piece of equipment may be impaired. The equipment was originally purchased for $9,000,000. Armstrong will continue to use this piece of equipment in the future. As of December 31, 2019, the equipment has a remaining useful life of 4 years and had been depreciated for six years. The equipment initially had a salvage value of $450,000 and the company uses the straight-line method of depreciation.

The expected future cash flows are presented below. The proper discount rate is 8%.

Year

2020 - 800,000

2021-600,000

2022-1,000,000

2023- 800,000

1. Determine if the asset is impaired
2. If the asset is impaired determine the amount of the impairment loss.