Question

Goodwill Allocation and Impairment Testing Porter Corporation acquired Stewart CEDERE vices, and Mobile Broadband. In addition, one of Porter's reporting units, U.S. Cellular, benefit on January 1, 2020, at a cost of $180 million. Stewart has three reporting units, Networks, Globe the acquisition. Relevant data are as follows, at the date of acquisition (in millions): 176 Chapter 4 Consolidated Financial Statements Subsequent to Acquisite LO 3 P4.6 Global Services Mobile Broadband Networks $50 35 55 $250 190 85 $125 100 30 Identifiable assets. Liabilities. Fair value of unit. U.S. Cellular is expected to increase in value by $10 million because of the acquisition. book value exceeds fair value for all reporting units. On December 31, 2020, the following amounts Assume qualitative assessment at December 31,2020, indicates that it is more likely than noe so estimated for a quantitative analysis of goodwill impairment (in millions): Global Services Mobile Broadband Networks U.S. Cellular Fair value of unit Book value of unit. $50 48 $90 92 $25 33 $ 95 100 In your answers below, show all numbers in millions. Required a. Calculate the total goodwill for this acquisition, and its allocation to the four reporting units at Janus 1.2020. b. Calculate any goodwill impairment for 2020, following U.S. GAAP. LO 2, 3 P4.7 Intangible Assets and Genc.

Need help for parts a & b for the problems

Answer 1

(A)Calculation of the gooodwil

Particulars	Amount(In Mn $)
Investment made in the Stewart Corporation	180
Less : Identifiable Net Assets( Fair Value of all units)(55+85+30)	170
Goodwill	10

Calculation of the Allocation of the goodwill to All units

Particulars	Network	Global Service	Mobile Broadband	U.S. Celluler
Goodwill of 10 to be allocated in ration of Net asset ratio(15:60:25)	1.5	6	2.5	10

(B)

Particulars	Network	Global Service	Mobile Broadband	U.S. Celluler
Book Value	48	92	33	100
Fair Value	50	90	25	95
Impairment	2	2	8	5
Allocation to :-
Goodwill	0	2	2.5	5
Asset	0	0	5.5	0
Balance:-
Goodwill	1.5	4	0	5
Asset	48.5	86	25	90