FASB Codification Memo

2. On August 6, 2015, Christie Inc. acquired all of the outstanding common stock of Emanuel, Corp for $420 million. The fair value of Emanuels net assets was $362 which allowed Christie to record $58 million in Goodwill. At the end of 2015, the following information was obtained in order to perform a goodwill impairment test: Fair value of Emanuel, Corp $400 million Fair value of Emanuels net assets (excluding goodwill) $370 million Book value of Emanuels net assets (including goodwill) $410 million a. Determine the amount of goodwill impairment loss that Christie should recognize at the end of 2015, if any. Provide supporting calculations and/or explanations b. Assume the same facts above, except that it occurred in 2020 (rather than 2015). Determine the amount of goodwill impairment loss that Christie should recognize at the end of 2020, if any. Provide supporting calculations and/or explanations.

Topic 1 (Based on Homework #1 Scenario 2): Your client is Christie, Inc. At the end of 2015, they think they may have an impairment of goodwill associated with Emanuel Corp. Prepare a memo explaining whether or not they have an impairment, and if they do, how much of an impairment would need to be recorded. You may assume that the qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit is less than its carrying amount.

ASC350-20-35-4, 6 and 8

ASC350-20-35-9

ASC350-20-35-11

ASC350-20-35-14, 16, 17