Goodwill Impairment, IFRS. Use the same information from E12- 5 but now assume that Brigatti Company is an IFRS reporter and that Cornish Division is a cash- generating unit. Assume costs to sell the unit are zero.
Required
a. Determine if goodwill is impaired assuming that the fair value of the Cornish Division with goodwill is equal to $ 2,000,000 and its value in use was $ 1,712,000 one year after acquisition. Provide the impairment journal entry, if necessary.
b. Determine if goodwill is impaired assuming that the fair value of the Cornish Division with goodwill is equal to $ 1,608,000 and value in use was $ 1,612,000 one year after acquisition. Provide the impairment journal entry, if necessary.