The Assets of the Aerospace Inc On December 31st, 2013, the Fair Values of the Assets

The assets of the Aerospace Inc. (a separately incorporated entity fully owned subsidiary of ABC Transport Inc.) showed the following asset carrying values on December 31st, 2013 (in millions) : $\begin{array}{|l|l|}\hline \text { Cash } & \$ 100 \\\hline \text { Accounts Receivable } & \$ 20 \\\hline \text { Inventories } & \$ 10 \\\hline \text { Property. Plant \& Equipment (net) } & \$ 200 \\\hline \text { Patents (net) } & \$ 20 \\\hline \text { Goodwill } & \$ 75 \\\hline & \\\hline \text { Total } & \$ 425 \\\hline\end{array}$
On December 31st, 2013, the fair values of the assets listed above were as follows:
$\begin{array}{|l|l|}\hline \text { Cash } & \$ 100 \\\hline \text { Accounts Receivable } & \$ 15 \\\hline \text { Inventories } & \$ 25 \\\hline \text { Property. Plant \& Equipment (net) } & \$ 120 \\\hline \text { Patents (net) } & \$ 60 \\\hline & \\\hline \text { Total } & \$ 320 \\\hline\end{array}$
Both ABC and Aerospace Inc. adhere to IFRS.

-Has the aerospace division experienced impairment? If so, by how much?

A) Yes, an impairment loss of $75 million has occurred.
B) Yes, an impairment loss of $105 million has occurred.
C) No, no impairment has taken place.
D) Yes, an impairment loss of $95 million has occurred.

Correct Answer:

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