Recorded value of goodwill = Acquisition price - Fair value of identifiable assets = $450,420 - $374,640 = $75,780
Particluars | 2014 | 2015 | 2016 |
Step 1 | |||
Fair value of reporting units | 400,600 | 400,450 | 350,410 |
Carrying value of identifiable net assets | 330,341 | 320,273 | 299,910 |
Carrying value of goodwill | 75,780 | 60,885 | 60,885 |
Total carrying value | 406,121 | 381,158 | 360,795 |
Excess of carrying value over fair value | 5,521 | -19,292 | 10,385 |
Step 2 | |||
Fair value of rporting units (A) | 400,600 | 350,410 | |
Fair value of identifiable net assets (B) | 339,715 | 324,360 | |
Implied fair value of goodwill (A) - (B) = C | 60,885 | 26,050 | |
Carrying value of goodwill (D) | 75,780 | 60,885 | |
Impairment on goodwill (C) - (D) | 14,895 | -34,835 |
Please note that there is no goodwill impairment for 2015 provided that the reporting unit's fair value is greater than the reporting unit's carrying value, and thus step 2 is not being done.
On January 1, 2013, Porsche Company acquired the net assets of Saab Company for $450,420 cash....
On January 1, 2013, Porsche Company acquired the net assets of Saab Company for $450,080 cash. The fair value of Saab’s identifiable net assets was $374,890 on this date. Porsche Company decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (Saab). The information for these subsequent years is as follows: For each year determine the amount of goodwill impairment, if any. Exercise 2-10 On January 1, 2013,...
On January 1, 2013, Porsche Company acquired the net assets of Saab Company for $450,080 cash. The fair value of Saab’s identifiable net assets was $374,890 on this date. Porsche Company decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (Saab). The information for these subsequent years is as follows: For each year determine the amount of goodwill impairment, if any. Please show work Exercise 2-10 On...
Exercise 2-10 On January 1, 2013, Porsche Company acquired the net assets of Saab Company for $449,660 cash. The fair value of Saab’s identifiable net assets was $375,570 on this date. Porsche Company decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (Saab). The information for these subsequent years is as follows: Year Present Value of Future Cash Flows Carrying Value of Saab’s Identifiable Net Assets* Fair...
Exercise 2-10 On January 1, 2013, Porsche Company acquired the net assets of Saab Company for $449,660 cash. The fair value of Saab’s identifiable net assets was $375,570 on this date. Porsche Company decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (Saab). The information for these subsequent years is as follows: Year Present Value of Future Cash Flows Carrying Value of Saab’s Identifiable Net Assets* Fair...
Exercise 2-10 On January 1, 2013, Porsche Company acquired the net assets of Saab Company for $450,800 cash. The fair value of Saab’s identifiable net assets was $375,520 on this date. Porsche Company decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (Saab). The information for these subsequent years is as follows: Year Present Value of Future Cash Flows Carrying Value of Saab’s Identifiable Net Assets* Fair...
For each year determine the amount of goodwill impairment, if any. On January 1, 2013, Porsche Company acquired 100% of Saab Company's stock for $451,730 cash. The fair value of Saab's identifiable net assets was $376,340 on this date. Porsche Company decided to measure goodwill ble prices of similar businesses to estimate the fair value of the reporting unit (Saab). The information for these subsequent years is as follows: Year 2014 2015 2016 Present Value of Future Cash Flows $400,630...
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