In 20X1, Cordova Inc. acquired Cordant Corporation and $140 million in goodwill was recorded. At the...
In 20X1, Cordova Inc. acquired Cordant Corporation and $140
million in goodwill was recorded. At the end of its 20X3 fiscal
year, management has provided the following information for a
required goodwill impairment test ($ in millions):
| Fair value of Cordant (approximates fair value less costs to sell) | $ | 980 | |
| Fair value of Cordant’s net assets (excluding goodwill) | 900 | ||
| Book value of Cordant’s net assets (including goodwill) | 1,050 | ||
| Present value of estimated future cash flows | 1,000 | ||
Assuming that Cordant is considered a reporting unit, the amount of goodwill impairment loss that Cordova should recognize according to U.S. GAAP is:
Multiple Choice
-
None.
-
$20 million.
-
$50 million.
-
$70 million.
Homework Answers
Answer:- $70 million.
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In 20X1, Cordova Inc. acquired Cordant Corporation and $140
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