Question

In 2018, Martin Corp. acquired Glynco and recorded goodwill of $100 million. Martin considers Glynco a separate reporting unit. By the end of 2021, the net assets (including goodwill) of Glynco are $320 million and its estimated fair value is $260 million. The amount of the impairment loss that Martin would record for goodwill at the end of 2021 is:

Multiple Choice

• $0.

• $60 million.

• $40 million.

• $160 million.

Answer 1

Impairment loss = Carrying value - fair value

= $320 - $260

= $60 million

The amount of the impairment loss that Martin would record for goodwill at the end of 2021 is = $60 million.