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In 2018, Martin Corp. acquired Glynco and recorded goodwill of $49 million. Martin considers Glynco a...

In 2018, Martin Corp. acquired Glynco and recorded goodwill of $49 million. Martin considers Glynco a separate reporting unit. By the end of 2021, the net assets (including goodwill) of Glynco are $324 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

  • $64 million.

  • $49 million.

  • $15 million.

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Answer #1

Total Impairment loss = Carrying value - fair value

= $324 - $260

= $64 million

The amount of the impairment loss that Martin would record for goodwill at the end of 2021 is = $49 million.

(restricted upto the amount of goodwill recorded)

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