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WebHelper Inc. acquired 100% of the outstanding stock of Silicon Chips Corporation (SCC) for $461 million, of which $17.2 million was allocated to goodwill. At the end of the current fiscal year, an impairment test revealed the following: fair value of SCC, $46.2 million; fair value of SCCs net assets (excluding goodwill), $42.6 million; book value of SCCs net assets (including goodwill), $45.3 million. What amount of impairment loss should WebHelper recognize? (Enter your answers in millions, (i.e., 10,000,000 should be entered as 10)) Impairment loss million

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Answer #1

we need to check for impairement of goodwill

so we need to check that

is FMV of SCC > Book Value of SCC before checking impairement

We are given : Fair value of SCC-$46.2 Million ; Book Value of SCC-$45.3 Million

So FMV of SCC($46.2 Million) > Book Value of SCC($45.3 million)

so we have no impairment.

So Impairement Loss - $0 million

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