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On January 1, 2017, Pingu Company acquired the net assets of Star Company for $650,000 cash. The fair value of Saab's identifiable net assets was
On January 1, 2017, Pingu Company acquired the net assets of Star Company for $650,000 cash. The fair value of Saab's identifiable net assets was $475,000 on this date. Pingu Company decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (Star). The information for these subsequent years is as follows: Year PV(FV) of future cash flows (5) Carry value (BV) of Star Net Assets ($) Fair value (FV) of Start Net Assets ($) 2018 600,000 550,000 500,000 2019 2020 630,000 520,000 520,000 550,000 500,000 525,000
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