Choice "A" is correct. Under IFRS, the goodwill impairment test is a one-step test in which the carrying value of a cash-generating unit ( CGU) is compared to the CGU's recoverable amount, which is the greater of the CGU's fair value less costs to sell and its value in use (PV of future cash flows expected from the CGU). For this CGU, the fair value less costs to sell of $955,000 is the recoverable amount because it exceeds the value in use of $940,000. The impairment loss is: Impairment loss Impairment loss$955,000 - $1,015,000$(60,000) Under IFRS, the CGU impairment loss is applied first to the goodwill of the CGU. Choice "b" is incorrect. An impairment loss must be recorded under IFRS because the carrying value of the cash-generating unit exceeds the cash generating unit's recoverable amount.
Choice "d" is incorrect. This is the carrying value of the goodwill after recording the $60,000 impairment loss.
Choice "c" is incorrect. The goodwill impairment loss is not calculated using the value in use (PV of future cash flows) of $940,000. Under IFRS, the goodwill impairment test is a one-step test in which the carrying value of a cash-generating unit ( CGU) is compared to the CGU's recoverable amount, which is the greater of the CGU's fair value less costs to sell and its value in use (PV of future cash flows expected from the CGU). In this problem, the recoverable amount is the fair value less costs to sell of $955,000.