WebHelper Inc. acquired 100% of the outstanding stock of Silicon Chips Corporation (SCC) for $45.7 million, of which $16.4 million was allocated to goodwill. At the end of the current fiscal year, an impairment test revealed the following: fair value of SCC, $41.4 million approximates fair value less costs to sell and that the present value of SCC’s estimated future cash flows is $41.7 million; book value of SCC’s net assets (including goodwill), $44.1 million. If Web-Helper prepares its financial statements according to IFRS and SCC is considered a cash-generating unit.
WebHelper Inc. acquired 100% of the outstanding stock of Silicon Chips Corporation (SCC) for $45.7 million, of which $16.4 million was allocated to goodwill. At the end of the current fiscal year, an impairment test revealed the following: fair value of SCC, $41.4 million approximates fair value less costs to sell and that the present value of SCC’s estimated future cash flows is $41.7 million; book value of SCC’s net assets (including goodwill), $44.1 million. If Web-Helper prepares its financial statements according to IFRS and SCC is considered a cash-generating unit.
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter12: Auditing Long-lived Assets And Merger And Acquisition Activity
Section: Chapter Questions
Problem 37RQSC
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WebHelper Inc. acquired 100% of the outstanding stock of Silicon Chips Corporation (SCC) for $45.7 million, of which $16.4 million was allocated to
What amount of impairment loss, if any, should WebHelper recognize?
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