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Return to course 23 My Subscriptions Cheyenne Motley eBook Print Question 2 incomplete answer Marked out of 1.00 y Region Support Goodwill Impairment Test-Prior to Adoption of FASB ASU 2017-04 Assume that the equity method Equity Investment account relating to a subsidiary has a reported balance of $2,510.000, including $240,000 of Goodwil. The fair value of the subsidiary is $2.250,000. The fair value of the subsidiary's individually identifiable net assets is $2,150,000. The subsidiary has only one reporting unt, which is the same as the overall entity For this fact set determine whether Goodwill is impaired and, if so, the amount of impairment assuming the parent company has not yet adopted FASB ASU 2017-04 Enter the impairment amount below. If the goodwill is not impaired enter zero. $0 Prepare the required journal entry if you determine Goodwill is impaired. If Goodwil is not impaired, select "No entry" as your answers under Description and leave the Debit and Credit answers blank (zero) Description Credit Equity income from sudury Equity investment Please answer all parts of the question Debit D Next Previous Save Answers BRPM O B! 5 9 UD Type here to search

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Answer is highlighted in yellow: Prior to adoption of FASB ASU 2017-04: Solution: Quantitative Goodwill impairment test: Fair value of the Subsidiary Book value of reporting unit net assets Since, book value is more than the market fair value. Therefore, potential goodwill impairment is applicable. 2250000 2510000 Fair value of the Subsidiary Fair value of reporting unit exlcuding goodwill Implied Fair value of goodwill Book value of goodwill a) Goodwill Impairment 2250000 2150000 100000 240000 140000 b) Naming convention is not available, can be slightly different: Journal entry 140000 Impairment loss - Goodwill Goodwill (To record the impairment loss of goodwill) 140000