Reference no: EM132972050

At December 31, 2020, the assets of Black Company's cash-generating unit (CGU) that include goodwill are shown below (in millions) on the company's statement of financial position:
($ in millions)
                            Cost           Accumulated Depreciation       Net Book Value
Goodwill                  $2,000                      $ 0                            $2,000
Equipment                15,000                     5,000                        10,000
Land                         8,000                            0                          8,000
Building                       33,000                       11,000                     22,000
Total                             $58,000                   $16,000                   $42,000

• An impairment test indicates that the fair value less costs to sell of the CGU's assets is $38,000 million and its value in use is $36,500 million. The assets are not separable-they must be operated or sold together as a group. Assume that Black uses IFRS.

Required:

Problem 1: Determine if the CGU is impaired and prepare the adjusting entry to record the impairment ( if any). Round the amounts to the nearest million $.