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Kentfield Corporation has $300 million of goodwill on its book from the 2015 acquisition of Seaford Shipping. At the end of its 2018 fiscal year,
Kentfield Corporation has $300 million of goodwill on its book from the 2015 acquisition of Seaford Shipping. At the end of its 2018 fiscal year, management has provided the following information for a required goodwill impairment test ($ in millions):
Fair value of Seaford (approximates fair value less costs to sell) | $ | 850 | |
Fair value of Seafords net assets (excluding goodwill) | 640 | ||
Book value of Seafords net assets (including goodwill) | 860 | ||
Present value of estimated future cash flows | 815 | ||
Required: Assuming that Seaford is considered a reporting unit for U.S. GAAP and a cash-generating unit for IFRS, determine the amount of goodwill impairment loss that Kentfield should recognize according to U.S. GAAP and International Financial Reporting Standards (IFRS).
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