Alomar Co., a consolidated enterprise, conducted an impairment review for each o

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 has recognized net assets of $1,094, including goodwill of $755. Seller’s fair value is assessed at $1,028 and includes two internally developed unrecognized intangible assets (a patent and a customer list with fair values of $199 and $56, respectively). The following table summarizes current financial information for the Sellers reporting unit:

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

b.After recognition of any goodwill impairment loss, what are the reported book values for the following assets of Alomar’s reporting unit Sellers?

•Tangible assets, net.

•Goodwill.

•Patent.

•Customer list.

Carrying
Amounts Fair  
Values Tangible assets, net $    84 $ 137 Recognized intangible assets, net      255 326 Goodwill      755 ? Unrecognized intangible assets         0 255 Total $1,094 $1,028

Explanation / Answer

a)

a) Impaiment Loss = Carrying Value - Fair Value

=> Total Fair Value = $1028

=> ($137+$326+Goodwill+$255 = $1028

=> Goodwill + $718 = $1028

=> Goodwill = $1028 - $718

=> Fair Value of Goodwill = $310

Impairment Loss = $755 - $310

Impairment Loss = $445

b) Book Value of Assets :-

Particulars Amount($) Tangible Assets,Net 84 Goodwill 310 Patent 0 Customer List 0

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