What will happened if Carrying value of goodwill = Implied value of goodwill? Should the 50,000 be the goodwill to be reported at year-end?
Homework Answers
Solution:
Yes, $50,000 will be reported as goodwill at year-end if carrying value of goodwill is equal to implied value of goodwill.
Explanation:
1) Impairment loss of goodwill will be calculated based on implied value and carrying value of goodwill.
2) If the carrying value of goodwill is greater than implied value of goodwill, then there will be impairment loss to an extent of differences between the both.
3) If the carrying value of goodwill is less than implied value of goodwill, then there will be no impairment loss and goodwill value remains same.
4) If the carrying value of goodwill is equal to implied value of goodwill, then there will be no impairment loss and goodwill value remains same.
Conclusion:
So, We can say that if the carrying value and implied value is same, then there will be no change in goodwill carrying value of $ 50,000
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