Bronze Company, an IFRS reporter, holds an available- for- sale debt investment with a carrying value of $ 45,000. The current fair value of the investment is $ 38,000 and the present value of the future cash flows from the debt investment is $ 44,000. Bronze does not intend on selling the investment, nor does it deem it more likely than not that it will have to sell the debt investment before the market recovers. Bronze establishes that there is objective evidence of impairment for IFRS impairment testing purposes.
Required
a. Determine whether an impairment loss exists.
b. I f an impairment exists, what amount of loss will Bronze report in net income? What amount of loss will it report in other comprehensive income? What is the journal entry for the impairment loss, if needed?