Chapter 12, Problem 12.6E

Tangible Asset Impairment Loss, IFRS. Use the same information from E12-1 but now assume that Henne Optical Corporation is an IFRS reporter. Henne Optical’s discount rate is 5% and costs to sell any equipment are zero.

Required

1. a. Determine the asset group for purposes of impairment testing and justify your decision.
2. b. Compute the impairment loss for the asset group identified in (a) for the current year, if any.
3. c. Prepare the journal entry to record the impairment loss, if needed.