Purchase Company recently acquired several businesses and recognized goodwill in each acquisition. Purchase has allocated the resulting goodwill to its three reporting units: RU-1, RU-2, and RU-3. Purchase opts to skip the qualitative assessment and therefore performs a quantitative goodwill impairment review annually. In its current-year assessment of goodwill, Purchase provides the following individual asset and liability carrying amounts for each of its reporting units: Carrying Amounts RU-1 RU-2 RU-3 Tangible assets $209,000 $299,000 $152,250 Trademark 220,000 Customer list 129,000 Unpatented technology 198,000 Licenses 122,000 Copyrights 55,250 Goodwill 193,800 220,850 125,500 Liabilities (31,250) The total fair values for each reporting unit (including goodwill) are $703,050 for RU-1, $807,250 for RU-2, and $650,300 for RU-3. To date, Purchase has reported no goodwill impairments. How much goodwill impairment should Purchase report this year for each of its reporting units?
Purchase Company recently acquired several businesses and recognized goodwill in each acquisition. Purchase has allocated the resulting goodwill to its three reporting units: RU-1, RU-2, and RU-3. Purchase opts to skip the qualitative assessment and therefore performs a quantitative goodwill impairment review annually. In its current-year assessment of goodwill, Purchase provides the following individual asset and liability carrying amounts for each of its reporting units: Carrying Amounts RU-1 RU-2 RU-3 Tangible assets $209,000 $299,000 $152,250 Trademark 220,000 Customer list 129,000 Unpatented technology 198,000 Licenses 122,000 Copyrights 55,250 Goodwill 193,800 220,850 125,500 Liabilities (31,250) The total fair values for each reporting unit (including goodwill) are $703,050 for RU-1, $807,250 for RU-2, and $650,300 for RU-3. To date, Purchase has reported no goodwill impairments. How much goodwill impairment should Purchase report this year for each of its reporting units?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 10RE
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Purchase Company recently acquired several businesses and recognized
In its current-year assessment of goodwill, Purchase provides the following individual asset and liability carrying amounts for each of its reporting units:
| Carrying Amounts | |||
| RU-1 | RU-2 | RU-3 | |
| Tangible assets | $209,000 | $299,000 | $152,250 |
| Trademark | 220,000 | ||
| Customer list | 129,000 | ||
| Unpatented technology | 198,000 | ||
| Licenses | 122,000 | ||
| Copyrights | 55,250 | ||
| Goodwill | 193,800 | 220,850 | 125,500 |
| Liabilities | (31,250) | ||
The total fair values for each reporting unit (including goodwill) are $703,050 for RU-1, $807,250 for RU-2, and $650,300 for RU-3. To date, Purchase has reported no goodwill impairments.
How much goodwill impairment should Purchase report this year for each of its reporting units?
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