Roland Corporation uses special strapping equipment in its packaging business. The equipment was purchased in January 2019 for $10.20 million and had an estimated useful life of 8 years with no residual value. In early April 2020, a part costing $890,000 and designed to increase the machinery's efficiency was added. The machine's estimated useful life did not change with this addition. By December 31, 2020, new technology had been introduced that would speed up the obsolescence of Roland's equipment. Roland's controller estimates that expected undiscounted future net cash flows on the equipment would be $6.43 million, and that expected discounted future net cash flows on the equipment would be $5.92 million. Fair value of the equipment at December 31, 2020, was estimated to be $5.71 million. Roland intends to continue using the equipment, but estimates that its remaining useful life is now 4 years. Roland uses straight-line depreciation. Assume that Roland is a private company that follows ASPE.

Required:

a. Prepare the journal entry to record asset impairment at December 31, 2020, if any. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

December 31, 2020	Loss on Impairment	2,731,108
	Accumulated Impairment Losses - Equipment		2,731,108

b. Fair value of the equipment at December 31, 2021, is estimated to be $6.02 million. Prepare any journal entries for the equipment at December 31, 2021. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

December 31, 2021	Depreciation Expense	1,427,500
	Accumulated Depreciation - Equipment		1,427,500

c. Repeat part (b), assuming that on December 31, 2021, Roland's management decides to dispose of the equipment. As at December 31, 2021, the asset is still in use and not ready for sale in its current state. In February 2022, Roland's management will meet to outline an active program to find a buyer. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

d. Repeat part (b), assuming that the equipment is designated as held for sale as of January 1, 2021, and that the equipment was not in use in 2021 but was still held by Roland on December 31, 2021.

e. For each situation in parts (b), (c), and (d), indicate where the equipment will be reported on the December 31, 2021 balance sheet.

f. Repeat parts (a) and (b), assuming instead that Roland is a public company that prepares financial statements in accordance with IFRS.

g. From the perspective of a financial statement user, discuss the importance of frequent impairment testing in producing relevant and faithfully representative financial statements. Do IFRS and ASPE differ in the required frequency? Explain briefly.