Answered step by step
Verified Expert Solution
Question
1 Approved Answer
#4-CH 12 INTANGIBLE ASSETS AND IMPAIRMENT On September 1, 2023, Mona Lisa Corp., a public company, purchased Jaramoil Enterprises for $763,000 cash. At the
#4-CH 12 INTANGIBLE ASSETS AND IMPAIRMENT On September 1, 2023, Mona Lisa Corp., a public company, purchased Jaramoil Enterprises for $763,000 cash. At the time of purchase, Jaramoil's SFP showed assets of $850,000, liabilities of $430,000 and shareholders' equity of $420,000. The fair value of Jaramoil's identifiable assets is estimated to be $1,080,000. REQUIRED: a) Calculate the amount of goodwill purchased by Mona Lisa. b) Assume the purchased company was folded into an existing Cash Generating Unit ("CGU") including the goodwill as indicated below. The CGU's 'value in use' at the balance sheet date was $3,850,000 and 'fair value less cost to sell' was $4,250,000. Determine if goodwill is impaired and prepare a JE, if needed. Assets other than goodwill Goodwill Carry value of CGU CGU $4,500,000 $ 113,000 $ 4,613,000 c) Explain how a future reversal of impairment is accounted for under IFRS.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started