For goodwill impairment test - step one: American corporation - reporting units
ID: 2520572 • Letter: F
Question
For goodwill impairment test - step one:
American corporation - reporting units
Subsidiary a
Subsidiary b
Fair value of reporting unit
$137,000,000
$ 230,000,000
Carrying value of net assets
(excluding goodwill)
112,000,000
210,000,000
Carrying value of goodwill
21,000,000
46,000,000
For goodwill impairment test - step two:
Fair value - tangible net assets
$ 72,000,000
$ 114,000,000
Fair value - recognized intangibles
43,000,000
80,250,000
Fair value - unrecognized intangibles:
trademark
1,500,000
4,000,000
Employment contract
2,000,000
8,000,000
Assembled workforce
5,000,000
5,000,000
In-process research & development
2,500,000
7,000,000
Potential contracts
4,000,000
3,000,000
Customer list
1,000,000
6,000,000
What is indication of goodwill imparement (step 1)?
What is carrying value of the company A and B?
What is fair value of goodwill company A and B?
What is carrying value of goodwill company A and B?
What is book value of identifiable net asset company A and B?
What is fair value of identifiable net asset of company A and B?
What is goowill impairment loss for company A and B?
American corporation - reporting units
Subsidiary a
Subsidiary b
Fair value of reporting unit
$137,000,000
$ 230,000,000
Carrying value of net assets
(excluding goodwill)
112,000,000
210,000,000
Carrying value of goodwill
21,000,000
46,000,000
Explanation / Answer
subsidiary A subsidiary B fair value of the companies 137000000 230000000 A carrying value of net assets (excluding goodwill) 112000000 210000000 carrying value of goodwill 21000000 46000000 carrying value of the companies 133000000 256000000 B difference (A-B) 4000000 -26000000 there is an indication that goodwill of company B is impaired (step 1) as fair value is less than carrying value -26000000 (Ans 1) carrying value of the companies 133000000 256000000 (Ans 2) Fair value of tangible net assets 72000000 114000000 C Fair value of recognised intangibles 43000000 80250000 D Fair value of identifiable net assets (C + D) 115000000 194250000 ans 6 Fair value of unrecognized intangibles trademark 1500000 4000000 employment contract 2000000 8000000 assembled work force 5000000 5000000 In process research and development 2500000 7000000 Potential contracts 4000000 3000000 customer list 1000000 6000000 total Fair value of unrecognized intangibles 16000000 33000000 E fair value of goodwill (A- total assets) 6000000 2750000 F ans 3 carrying value of goodwill 21000000 46000000 G ans 4 given in the problem Book value of identifiable net assets 112000000 210000000 ans 5 Good will impairment loss(F-G) NIL -43250000 ans 7 For subsidiary A there is no impairment loss as in Step 1 carrying valueRelated Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.