Question 1 On September 1, 2017, Bridgeport Corporation acquired Tunneling Limit

Question

Question 1 On September 1, 2017, Bridgeport Corporation acquired Tunneling Limited for a cash payment of $943,400. At the time of purchase, Tunneling's statement of financial position showed assets of $787,200, liabilities of $455,300, and owners' equity of $331,900. The fair value of Tunneling's assets is estimated to be $1,165,400. Assume that Bridgeport Corporation is a private entity. The unit's carrying amount (including goodwill) is $3,578,900 and its fair value is $3,472,600 Determine the amount of impairment loss, if any, under ASPE. Amount of impairment loss

Explanation / Answer

ASPE determines an impairment loss as the excess of the carrying amount above fair value.

Goodwill is included in the carrying amount of an asset group to be tested for impairment only if the asset group is or includes a reporting unit.

Unit's carrying amount = 3578900

Fair Value of unit = 3472600

Amount of impairment loss = 3578900 - 3472600 = 106300

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