In 2020 a U S private entity reported $8 million of goodwill in last year's balance sheet The entity has elected the accounting alternative for subsequent measurement of goodwill How should the entity calculate its reported goodwill for the current year Calculate the yearly amortization, reduce the beginning balance, and report the current year's amortization expense on the income statement If circumstances warrant, perform a goodwill impairment test Determine whether the fair value of the reporting unit is less than the carrying amount and if so reduce the balance of goodwill and report an impairment loss on goodwill in the income statement Determine whether the fair value of the reporting unit is greater than the carrying amount and if so increase the amount of goodwill and report the recovery of any previous impairment in the income statement Determine whether the fair value of the reporting unit is greater than the carrying amount and if so increase the balance of goodwill and report a gain on goodwill in the income statement

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Posted on Sep 07, 2024

In 2020 a U.S. private entity reported $8 million of goodwill in last year's balance sheet. The entity has elected the accounting alternative for subsequent

In 2020 a U.S. private entity reported $8 million of goodwill in last year's balance sheet. The entity has elected the accounting alternative for subsequent measurement of goodwill. How should the entity calculate its reported goodwill for the current year?

		Calculate the yearly amortization, reduce the beginning balance, and report the current year's amortization expense on the income statement. If circumstances warrant, perform a goodwill impairment test.
		Determine whether the fair value of the reporting unit is less than the carrying amount and if so reduce the balance of goodwill and report an impairment loss on goodwill in the income statement.
		Determine whether the fair value of the reporting unit is greater than the carrying amount and if so increase the amount of goodwill and report the recovery of any previous impairment in the income statement.
		Determine whether the fair value of the reporting unit is greater than the carrying amount and if so increase the balance of goodwill and report a gain on goodwill in the income statement.