filling up the blanks of the following tables.

Revenue growth attributed to BMN in the cash flow model was 10% in fiscal 2022 and 15% in fiscal 2023 Professional judgment framework Income projections prepared as part of the acquisition work indicated expected growth in AKS, consolidated income of 10%, to $22.0 million, in fiscal 2022 and 15%, to $25.3 mil- lion, in fiscal 2023 from BMN. Goodwill impairment Part 1 Expenses other than for cost of goods sold were budgeted to remain flat for the next two years. Background Company AKS common shares are publicly traded and it files with the SEC. AKS has a sin- gle reporting unit, which sells high-end consumer electronics. AKS has a March 31 fiscal year-end. Fiscal 2021 data On April 1, 2020, AKS acquired a competitor, BMN, for $20.0 million. The purchase price was approximately 10 times BMN's projected fiscal 2022 income. After completing the purchase price allocation, the goodwill from this acquisition was recorded at $10.0 million. In compliance with ASC 350, AKS was required to perform a goodwill impairment test. The goodwill impairment test identifies potential impairment by comparing the fair value of a re- porting unit with its carrying amount, including goodwill. AKS decided they would perform this test annually in January. The company determined that there was one reporting unit (AKS in total) at which the goodwill would be tested for impairment In January 2021, as directed by the CFO, the controller of AKS initiated the process to deter mine whether there was any impairment of the goodwill. Because this was a new process, the controller decided to hire a certified specialist in the valuation business to prepare the val uation. Below is information available regarding the valuation process: Based on the valuation, the fair value of the reporting unit exceeded its carrying amount by 20%. AKS concluded that based on this quantitative analysis, there was no goodwill impair ment in fiscal 2021 The valuation specialist used the income approach using a discounted cash flow model to derive the fair value The weighted-average cost of capital (WACC) to AKS was 7% Fiscal 2022 data At December 31, 2021, AKS had total assets of $100 million and net equity of $10.0 million. The following additional financial information is based on actual results for the first three quar ters of fiscal 2022, ended December 31, 2021, and projected results for the fourth quarter ended March 31, 2022. Auditors of AKS have performed reviews of quarterly results to date for fiscal 2022. There have been no restatements. In January 2017, ASU 2017-04, Intangibles Goodwill and Other (Topic 350)- Simplifying the Test for Goodwill Impairment, was issued. This ASU was issued in response to concerns about the cost and complexity of performing the two step goodwill impairment test. Topic 350still provides management the option to first assess qualitative factors to make a determi nation of whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after a full qualitative assessment, an entity determines it is more likely than not that the fair value of a reporting unit is more than its carrying amount, then perform ing the quantitative assessment is unnecessary Revenues are projected to increase by 18%. This increase is primarily driven by the ac- quisition of BMN (approximately 11% of the increase): the addition of three large custom- ers, which were taken away from competitors (approximately 5% of the increase), and the balance is the result of increased demand for AKS' products. In January 2022, you have assumed the role of the controller. You are now responsible for performing the annual impairment testing for goodwill. The CFO believes that there is no im- pairment issue given that a valuation was just performed in the prior year, which indicated a fair value 20% over carrying value and also because the fiscal results for 2022 have re- mained stable so far. He has advised you to take advantage of the option to use the qualita- tive approach in an effort to eliminate the $100,000 appraisal fee incurred in the prior year The CFO believes this approach will be simple and should reduce the accounting depart- ment's workload. -The demand for AKS' products was very strong in the first six months. During the second half of the year, the economy softened and the demand for AKS' products began to drop The forecasted decrease in units sold for the last six months is estimated to be 3% to 4% In the fourth quarter, AKS began offering pricing concessions to maintain sales. The price concessions offered so far in the fourth quarter have been in the range of 2% to 3% and have helped mitigate the decline in units sold. Income for the year is forecasted to be $24.0 million. The WACC for AKS is expected to remain at 7% Expenses other than for cost of goods sold increased by 1% You had discussions with the AKS executive team early this month and have gained the fol- lowing insights The BMN acquisition has been successful and there are no intentions to sell any po rtion -The S&P 500 index has dropped 5% since the prior year. The S&P index for public com- of the business. The BMN management team remains intact and is still operating under a non-compete agreement for another year. The executive team for AKS is also ex pected to remain consistent. panies within AKS' industry are down on average 196. The price of AKS stock has been stable this year and is not expected to change signifi- cantly in the fourth quarter. The stock prices of AKS' public competitors have also been fairly stable. For Fiscal 2022, you perform the qualitative assessment. The major assumptions used in preparing the valuation in fiscal 2021 appear to be validated by 2022 forecasted results, so conclude that it is more likely than not that the fair value of AKS exceeds the carrying value Rerenu increases duc to the acquisition of BMN Revenue increases due e acquiitiui uf une large customer Decreese in revenue do to loss in market share to AK3 largest competitor Decrease in ravanue due to a ganeral deceasa In demand for AKS products 14% 13) 2) 12% Part II Income for the year is forecastedto be $26.0 million. By reading AKS' financial information, press releases and industry-specific material, the fol- lowing matters were noted In April 2022, the board of AKS authorized the repurchase of up to $5.0 million worth of its stock over the next eight months. There were no repurchases in 2022. In early January 2023, the controller began preparing the qualitative analysis addressing whether there is goodwill impairment. The controller utilized an application template as a doc- umentation tool and was able to complete the following sections of the template: Overarching considerations Considerations to define the issue Considerations to gather the facts, including a supplemental guidance table In the middle of January 2023, the controller went out on leave. The assistant controller must now complete the qualitative analysis addressing whether there is goodwill impairment. The CFO expressed confidence that the qualitative assessment would indicate there was no im- pairment based on the results of the valuation performed two years ago and based on the overall profitability of the business and the expectations of strong growth in the future. Addi tionally, if there is no impairment, the CFO believes the earnings forecast will be met and it is likely bonuses will be paid out. The cost of a valuation appraisal has not been included in this year's budget. Fiscal 2023 data At December 31, 2022, AKS had total assets of S120.0 million and net equity of $14.0 million. The following information is based on actual results for the first three quarters of fiscal 2023 and projected results for the fourth quarter. Auditors of AKS have performed reviews of quar terly results to date for fiscal 2023. There have been no restatements The former CEO of BMN has announced that she plans to leave AKS when her non-compete agreement expires on March 31, 2023. AKS announced this role would be assumed by the COO of BMN. AKS management has publicly stated they have no intention of selling BMN to its former CEO. AKS' top management involved in the acquisition of BMN remains commit- ted to fully integrating the operations of the two companies. In the first quarter, AKS' largest competitor acquired another company in the industry for $15.0 million. The competitor's press release indicated they expected annual income to grow by $3.0 million as a result of this acquisition. Overall, during the first three quarters, there was a decline in consumer confidence, which re sulted in a slight decline in the demand for AKS' product. Based on industry articles, it ap- pears that the industry is poised for a rebound starting in early 2023 Fairly stable selling costs are in part attributable to lowering costs by selling some products on the web. This offset a small increase in commission rates The CFO is in negotiation with a lender regarding extending maturing debt. Preliminary indi- cations are that the lenders will agree to extend the maturity dates of the debt but they wil want an increase in the interest rate from 7% to 8% The S&P index has dropped 5% since the prior year. The S&P index for public companies within AKS industry is down on average 4% In late January 2023, the CFO introduced the assistant controller to the new audit team as- signed to the current audit and shared that the assistant controller had recently been given the task of completing the qualitative assessment for goodwill. During the meeting, the CFO expressed the belief that the qualitative assessment would indicate that there was no goodwill impairment. The meeting included a detailed discussion of the overarching considerations, the considerations to define the issue and the considerations to gather facts as documented by the controller After the meeting, the audit team reviewed the prior year work papers to determine what was done to audit the valuation in fiscal 2021 and the qualitative assessment in fiscal 2022. The audit team also completed their review of the overarching considerations, the considerations to define the issue and the considerations to gather facts as documented by the controller The audit partner informed the CFO they had completed their review and were not taking ex ception to these matters. Because of the time crunch to finish the audit, the CFO suggested that the audit manager independently analyze the information on the guidance table, perform the analysis and complete the judgment relating to the qualitative assessment for goodwill Afterward, the audit manager and the assistant controller would have conference call with the CFO to discuss their conclusions on the goodwill qualitative assessment before the assistant controller prepares the final documentation memorandum. During the fourth quarter of 2022, the following announcements occurred A competitor announced it was taking a $5.0 million goodwill impairment charge Another competitor with a 4% market share declared bankruptcy and said its business would be liquidated. A customer of AKS announced it was seeking to reorganize under bankruptcy laws. This customer accounted for approximately 1% of AKS, revenue and $50,000 in receivables Regulators in the United States have begun an investigation of AKS' industry for possible price fixing. AKS' management has issued a press release indicating that they believe this investigation has no merit and will not impact AKS AKS' stock price has been gradually declining in the last six months. It is down 5% since the prior year. In an effort to bolster its stock price, AKS announced in January 2023 that it would issue a 10% stock dividend in May 2023 Required Read the following fiscal 2023 qualitative assessment application template drafted by the controller with the following sections completed Overarching considerations Considerations to define the issue Considerations to gather the facts, including a supplemental guidance table (with appropriate paragraphs of the FASB Codification cited) Review the case and identify relevant information to be used in performing the qual tative assessment of goodwill for AKS in 2023. Complete the "Information availa- ble" column of the supplemental guidance table (starting on page 8) Provide an analysis of each item of relevant information to determine the impact it would have on your qualitative assessment nalysis Revenue growth attributed to BMN in the cash flow model was 10% in fiscal 2022 and 15% in fiscal 2023 Professional judgment framework Income projections prepared as part of the acquisition work indicated expected growth in AKS, consolidated income of 10%, to $22.0 million, in fiscal 2022 and 15%, to $25.3 mil- lion, in fiscal 2023 from BMN. Goodwill impairment Part 1 Expenses other than for cost of goods sold were budgeted to remain flat for the next two years. Background Company AKS common shares are publicly traded and it files with the SEC. AKS has a sin- gle reporting unit, which sells high-end consumer electronics. AKS has a March 31 fiscal year-end. Fiscal 2021 data On April 1, 2020, AKS acquired a competitor, BMN, for $20.0 million. The purchase price was approximately 10 times BMN's projected fiscal 2022 income. After completing the purchase price allocation, the goodwill from this acquisition was recorded at $10.0 million. In compliance with ASC 350, AKS was required to perform a goodwill impairment test. The goodwill impairment test identifies potential impairment by comparing the fair value of a re- porting unit with its carrying amount, including goodwill. AKS decided they would perform this test annually in January. The company determined that there was one reporting unit (AKS in total) at which the goodwill would be tested for impairment In January 2021, as directed by the CFO, the controller of AKS initiated the process to deter mine whether there was any impairment of the goodwill. Because this was a new process, the controller decided to hire a certified specialist in the valuation business to prepare the val uation. Below is information available regarding the valuation process: Based on the valuation, the fair value of the reporting unit exceeded its carrying amount by 20%. AKS concluded that based on this quantitative analysis, there was no goodwill impair ment in fiscal 2021 The valuation specialist used the income approach using a discounted cash flow model to derive the fair value The weighted-average cost of capital (WACC) to AKS was 7% Fiscal 2022 data At December 31, 2021, AKS had total assets of $100 million and net equity of $10.0 million. The following additional financial information is based on actual results for the first three quar ters of fiscal 2022, ended December 31, 2021, and projected results for the fourth quarter ended March 31, 2022. Auditors of AKS have performed reviews of quarterly results to date for fiscal 2022. There have been no restatements. In January 2017, ASU 2017-04, Intangibles Goodwill and Other (Topic 350)- Simplifying the Test for Goodwill Impairment, was issued. This ASU was issued in response to concerns about the cost and complexity of performing the two step goodwill impairment test. Topic 350still provides management the option to first assess qualitative factors to make a determi nation of whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after a full qualitative assessment, an entity determines it is more likely than not that the fair value of a reporting unit is more than its carrying amount, then perform ing the quantitative assessment is unnecessary Revenues are projected to increase by 18%. This increase is primarily driven by the ac- quisition of BMN (approximately 11% of the increase): the addition of three large custom- ers, which were taken away from competitors (approximately 5% of the increase), and the balance is the result of increased demand for AKS' products. In January 2022, you have assumed the role of the controller. You are now responsible for performing the annual impairment testing for goodwill. The CFO believes that there is no im- pairment issue given that a valuation was just performed in the prior year, which indicated a fair value 20% over carrying value and also because the fiscal results for 2022 have re- mained stable so far. He has advised you to take advantage of the option to use the qualita- tive approach in an effort to eliminate the $100,000 appraisal fee incurred in the prior year The CFO believes this approach will be simple and should reduce the accounting depart- ment's workload. -The demand for AKS' products was very strong in the first six months. During the second half of the year, the economy softened and the demand for AKS' products began to drop The forecasted decrease in units sold for the last six months is estimated to be 3% to 4% In the fourth quarter, AKS began offering pricing concessions to maintain sales. The price concessions offered so far in the fourth quarter have been in the range of 2% to 3% and have helped mitigate the decline in units sold. Income for the year is forecasted to be $24.0 million. The WACC for AKS is expected to remain at 7% Expenses other than for cost of goods sold increased by 1% You had discussions with the AKS executive team early this month and have gained the fol- lowing insights The BMN acquisition has been successful and there are no intentions to sell any po rtion -The S&P 500 index has dropped 5% since the prior year. The S&P index for public com- of the business. The BMN management team remains intact and is still operating under a non-compete agreement for another year. The executive team for AKS is also ex pected to remain consistent. panies within AKS' industry are down on average 196. The price of AKS stock has been stable this year and is not expected to change signifi- cantly in the fourth quarter. The stock prices of AKS' public competitors have also been fairly stable. For Fiscal 2022, you perform the qualitative assessment. The major assumptions used in preparing the valuation in fiscal 2021 appear to be validated by 2022 forecasted results, so conclude that it is more likely than not that the fair value of AKS exceeds the carrying value Rerenu increases duc to the acquisition of BMN Revenue increases due e acquiitiui uf une large customer Decreese in revenue do to loss in market share to AK3 largest competitor Decrease in ravanue due to a ganeral deceasa In demand for AKS products 14% 13) 2) 12% Part II Income for the year is forecastedto be $26.0 million. By reading AKS' financial information, press releases and industry-specific material, the fol- lowing matters were noted In April 2022, the board of AKS authorized the repurchase of up to $5.0 million worth of its stock over the next eight months. There were no repurchases in 2022. In early January 2023, the controller began preparing the qualitative analysis addressing whether there is goodwill impairment. The controller utilized an application template as a doc- umentation tool and was able to complete the following sections of the template: Overarching considerations Considerations to define the issue Considerations to gather the facts, including a supplemental guidance table In the middle of January 2023, the controller went out on leave. The assistant controller must now complete the qualitative analysis addressing whether there is goodwill impairment. The CFO expressed confidence that the qualitative assessment would indicate there was no im- pairment based on the results of the valuation performed two years ago and based on the overall profitability of the business and the expectations of strong growth in the future. Addi tionally, if there is no impairment, the CFO believes the earnings forecast will be met and it is likely bonuses will be paid out. The cost of a valuation appraisal has not been included in this year's budget. Fiscal 2023 data At December 31, 2022, AKS had total assets of S120.0 million and net equity of $14.0 million. The following information is based on actual results for the first three quarters of fiscal 2023 and projected results for the fourth quarter. Auditors of AKS have performed reviews of quar terly results to date for fiscal 2023. There have been no restatements The former CEO of BMN has announced that she plans to leave AKS when her non-compete agreement expires on March 31, 2023. AKS announced this role would be assumed by the COO of BMN. AKS management has publicly stated they have no intention of selling BMN to its former CEO. AKS' top management involved in the acquisition of BMN remains commit- ted to fully integrating the operations of the two companies. In the first quarter, AKS' largest competitor acquired another company in the industry for $15.0 million. The competitor's press release indicated they expected annual income to grow by $3.0 million as a result of this acquisition. Overall, during the first three quarters, there was a decline in consumer confidence, which re sulted in a slight decline in the demand for AKS' product. Based on industry articles, it ap- pears that the industry is poised for a rebound starting in early 2023 Fairly stable selling costs are in part attributable to lowering costs by selling some products on the web. This offset a small increase in commission rates The CFO is in negotiation with a lender regarding extending maturing debt. Preliminary indi- cations are that the lenders will agree to extend the maturity dates of the debt but they wil want an increase in the interest rate from 7% to 8% The S&P index has dropped 5% since the prior year. The S&P index for public companies within AKS industry is down on average 4% In late January 2023, the CFO introduced the assistant controller to the new audit team as- signed to the current audit and shared that the assistant controller had recently been given the task of completing the qualitative assessment for goodwill. During the meeting, the CFO expressed the belief that the qualitative assessment would indicate that there was no goodwill impairment. The meeting included a detailed discussion of the overarching considerations, the considerations to define the issue and the considerations to gather facts as documented by the controller After the meeting, the audit team reviewed the prior year work papers to determine what was done to audit the valuation in fiscal 2021 and the qualitative assessment in fiscal 2022. The audit team also completed their review of the overarching considerations, the considerations to define the issue and the considerations to gather facts as documented by the controller The audit partner informed the CFO they had completed their review and were not taking ex ception to these matters. Because of the time crunch to finish the audit, the CFO suggested that the audit manager independently analyze the information on the guidance table, perform the analysis and complete the judgment relating to the qualitative assessment for goodwill Afterward, the audit manager and the assistant controller would have conference call with the CFO to discuss their conclusions on the goodwill qualitative assessment before the assistant controller prepares the final documentation memorandum. During the fourth quarter of 2022, the following announcements occurred A competitor announced it was taking a $5.0 million goodwill impairment charge Another competitor with a 4% market share declared bankruptcy and said its business would be liquidated. A customer of AKS announced it was seeking to reorganize under bankruptcy laws. This customer accounted for approximately 1% of AKS, revenue and $50,000 in receivables Regulators in the United States have begun an investigation of AKS' industry for possible price fixing. AKS' management has issued a press release indicating that they believe this investigation has no merit and will not impact AKS AKS' stock price has been gradually declining in the last six months. It is down 5% since the prior year. In an effort to bolster its stock price, AKS announced in January 2023 that it would issue a 10% stock dividend in May 2023 Required Read the following fiscal 2023 qualitative assessment application template drafted by the controller with the following sections completed Overarching considerations Considerations to define the issue Considerations to gather the facts, including a supplemental guidance table (with appropriate paragraphs of the FASB Codification cited) Review the case and identify relevant information to be used in performing the qual tative assessment of goodwill for AKS in 2023. Complete the "Information availa- ble" column of the supplemental guidance table (starting on page 8) Provide an analysis of each item of relevant information to determine the impact it would have on your qualitative assessment nalysis