Question

Alomar Co., a consolidated enterprise, conducted an impairment review for each of its reporting units. In its qualitative assessment, one particular reporting unit, Sellers, emerged as a candidate for possible goodwill impairment. Sellers had recognized net assets with carrying amounts totaling $1,008, including goodwill of $600. Seller’s reporting unit fair value is assessed at $978 and includes two internally developed unrecognized intangible assets (a patent and a customer list with fair values of $132 and $142, respectively). The following table summarizes current financial information for the Sellers reporting unit:

	Carrying Amounts		Fair Values
Tangible assets, net	$134		$179
Recognized intangible assets, net	274		327
Goodwill	600		?
Unrecognized intangible assets	0		274

1. Determine the amount of any goodwill impairment for Alomar’s Sellers reporting unit.

2. After recognition of any goodwill impairment loss, what are the reported carrying amounts for the following assets of Alomar’s reporting unit Sellers?

	Amounts a. Goodwill impairment loss $402 b. Tangible assets, net $134 Goodwill $198 Patent $0 Customer list $0

It is telling me the goodwill impairment loss and goodwill is incorrect.

Answer 1

Answer -

(a)

Particulars		Amount
Fair Value of reporting unit		$978
Fair Value of net assets excluding goodwill
Tangible assets	179
recognized intangibles	327
unrecognized intangibles	274	780
Implied value of goodwill		198
Carrying value of goodwill		600
Goodwill Impairment loss		402

(b)

tangible assets, net	134
Goodwill	198
Patent	0
Customer List	0

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