Question 5 (1 point)

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?

Question 5 options:

($200,000)

$0

$100,000

$200,000