# Eagle Company

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To: Eagle Company (Eagle) From: Subject: Eagle in Italy and Eagle in Serbia Impairments Date: May 7th 2014 1. For Eagle in Italy, is the building impaired under IFRS as of Dec. 31, 2013, and if so what is the amount of the impairment? After reviewing the given facts provided by Eagle in Italy, we have determined that there is an impairment on their building under IFRS for the amount of \$200,000. We have determined this through the use of IAS-36 as well as the calculations given below: IAS 36-6 An impairment loss is the amount by which the carrying amount of the asset or a cash-generating unit exceeds its recoverable amount. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs…show more content…
GAAP for the amount of \$250,000. We have determined this through the use of ASC Codification as well as the calculations given below: ASC 350-20-35-4 The first step of the goodwill impairment test…compares the fair value of a reporting unit with its carrying amount, including goodwill. ASC 350-20-35-6 If the carrying amount of a reporting unit is greater than zero and its fair value exceeds its carrying amount, goodwill of the reporting unit is considered not impaired; thus, the second step of the impairment test is unnecessary. ASC 350-20-35-8A If the carrying amount of a reporting unit is zero or negative, the second step of the impairment test shall be performed to measure the amount of impairment loss, if any, when it is more likely than not that a goodwill impairment exists. Fair Value of Eagle Serbia - Book Value of Eagle Serbia, including Goodwill \$1,050,000 – \$1,400,000 = Impairment Indicated ASC 350-20-35-9 The second step of the goodwill impairment test, used to measure the amount of impairment loss, compares the implied fair value of reporting unit goodwill with the carrying amount of that goodwill. ASC 350-20-35-14 The implied fair value of goodwill shall be determined in the same manner as the amount of goodwill recognized ... That is, an entity shall assign the fair value of a reporting unit to all of the assets and liabilities of that unit (including any unrecognized intangible