OPQ Inc. owns machinery that originally cost $500,000 with accumulated depreciation of $150,000. Due to technological advancements, the fair value of the machinery has declined to $200,000, and its expected future cash flows are $180,000.
- Determine if there is an impairment loss and, if so, calculate the amount. Prepare the journal entry to record the impairment loss. Discuss the implications of asset impairment on the balance sheet and income statement.