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 had recognized net assets with carrying amounts totaling $1,101, including goodwill of $680. Seller’s reporting unit fair value is assessed at $1,055 and includes two internally developed unrecognized intangible assets (a patent and a customer list with fair values of $189 and $105, respectively). The following table summarizes current financial information for the Sellers reporting unit:

	Carrying Amounts	Fair Values
Tangible assets, net	$127	$175
Recognized intangible assets, net	294	339
Goodwill	680	?
Unrecognized intangible assets	0	294

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

2. After recognition of any goodwill impairment loss, what are the reported carrying amounts for the following assets of Alomar’s reporting unit Sellers?

		Amounts
a.	Goodwill impairment loss
b.	Tangible assets, net
	Goodwill
	Patent
	Customer list

Answer 1

Goodwill (Fair value)
Total fair value	$1,055
less: tangible assets-net	$175
less: recognised intangible assets	$399
less: unrecognised intangible assets	$294
Fair value of goodwill	$187
Goodwill impairment loss
Carrying value of goodwill	$680
less: fair value of goodwill	$187
Goodwill impairment loss	$493

a) Goodwill impairment loss	$493
b) Tangible assets, net	$127
c) Goodwill	$187
d) Patent	0
e) customer list	0

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