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

Cost $7,020,000

Accumulated depreciation to date 780,000

Expected future net cash flows (undiscounted) 5,460,000

Expected future net cash flows (discounted, value in use) 4,953,000

Fair value 4,836,000

Costs to sell (costs of disposal) 39,000

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

Assume that Waterway 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 $5.07 million.

Prepare the journal entry, if any, to record the increase in fair value.

(1) December 31, 2020

(2) December 31, 2021

(3) December 31, 2021

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

(1) December 31, 2020

(2) December 31, 2021

(3) December 31, 2021