Please help me with this question with a detailed answer and an explanation. Thank you very much for your help. Assume the background of the case is under Canadian ASPE or IFRS if needed.

Question: (There are two parts, Part A and Part B)

PART A)

Safe Roadways Company is a private company.It employs 30 researchers who are involved with research and development of various ice and snow road treatments.All of the researchers are highly paid and regarded in the field of chemistry research.They are paid an annual salary and none of them have signed a long-term contract.Safe Roadways is 50 percent owned by Jack Frost, who started the company in 2013, and 50 percent owned by a group of venture capitalists who contributed $6 million of equity capital in 2016 to fund the R & D activity of the group.

On January 1, 2020 Salt and Sand Ltd (SS), a public company listed on the TSX Venture Exchange, acquired 100 percent of the shares of Safe Roadways by issuing 5 million of its own shares.Its shares were trading at $2 per share on the date of this transaction.

The balance sheet for Safe Roadways on January 1, 2020 was as follows:

Cash and marketable securities $ 1,500,000

Tangible capital assets net 1,700,000

Development costs 2,500,000

$ 5,700,000

Liabilities $800,000

Common shares 7,100,000

Deficit (2,200,000)

$ 5,700,000

The cash, marketable securities, tangible capital assets, and liabilities have fair values equal to carrying values. Prior to 2018, all of the research and development costs were expensed. Starting in 2019, the development costs were capitalized because the management of Safe Roadways felt that the company was getting close to patenting some of its products.

The management of Salt and Sand is aware that Safe Roadways will need to be included in Salt and Sand's consolidated financial statements.Management has the following questions related to these consolidated statements:

REQUIRED:

1.Will any of the purchase price be allocated to Safe Roadways' skilled workers? If so, how will this asset be valued and how will it be amortized or checked for impairment on an annual basis?

2.Will any of the purchase price be allocated to identifiable intangible assets? If so, how will this asset be valued and how will it be amortized or checked for impairment on an annual basis?

3.How much of the purchase price will be allocated to goodwill and how will goodwill be evaluated for impairment on an annual basis?

PART B)

The following information is available for Southcott Corp at December 31, 2020.

Carrying AmountFair Value

Equipment575 600

Recognized Intangible250 260

Trademark0 50

Goodwill200

1,025

Fair Value of Southcott's assets as a group is 750

Required:

a)Calculate the total impairment loss for Year ended December 31, 2020

b)After recognizing any impairment loss in (a), what are the reported carrying amounts for Southcott's assets listed above.