The information that follows relates to equipment owned by Buffalo Limited at December 31, 2020:

Cost		$ 8,640,000
Accumulated depreciation to date		960,000
Expected future net cash flows (undiscounted)		6,720,000
Expected future net cash flows (discounted, value in use)		6,096,000
Fair value		5,952,000
Costs to sell (costs of disposal)		48,000

Assume that Buffalo will continue to use this asset in the future. As at December 31, 2020, the equipment has a remaining useful life of four years. Buffalo uses the straight-line method of depreciation.

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Your answer is partially correct.

Assume that Buffalo is a private company that follows ASPE.

1.		Prepare the journal entry at December 31, 2020, to record asset impairment, if any.
2.		Prepare the journal entry to record depreciation expense for 2021.
3.		The equipments fair value at December 31, 2021 is $ 6.24 million. Prepare the journal entry, if any, to record the increase in fair value.

(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.)

No.	Date	Account Titles and Explanation	Debit	Credit
(1)	December 31, 2020	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
(2)	December 31, 2021	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
(3)	December 31, 2021	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount

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List of Accounts

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Your answer is incorrect.

Repeat the requirements in (a) above assuming that Buffalo is a public company that follows IFRS. (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.)

No.	Date	Account Titles and Explanation	Debit	Credit
(1)	December 31, 2020	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
(2)	December 31, 2021	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount
(3)	December 31, 2021	enter an account title	enter a debit amount	enter a credit amount
		enter an account title	enter a debit amount	enter a credit amount

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