Question
Please explain the results for the Patent and Customer list are zero? Problem 3-17 (Algo) (LO 3-6) Alomar Co., a consolidated enterprise, conducted an impairment
Please explain the results for the Patent and Customer list are zero? Problem 3-17 (Algo) (LO 3-6) Alomar Co., a consolidated enterprise, conducted an impairment review for each of its reporting units. In its qualitative assessment, one particular reporting unit, Sellers, emerged as a candidate for possible goodwill impairment. Sellers had recognized net assets with carrying amounts totaling $1,124, including goodwill of $610. Sellers reporting unit fair value is assessed at $1,038 and includes two internally developed unrecognized intangible assets (a patent and a customer list with fair values of $236 and $82, respectively).
The following table summarizes current financial information for the Sellers reporting unit:
Carrying Amounts Fair Values Tangible assets, net $196 $234 Recognized intangible assets, net 318 351 Goodwill 610 ? Unrecognized intangible assets 0 318
Determine the amount of any goodwill impairment for Alomars Sellers reporting unit. After recognition of any goodwill impairment loss, what are the reported carrying amounts for the following assets of Alomars reporting unit Sellers?
a.
Goodwill impairment:
Fair value of reporting unit | $ | 1,038 |
Carrying amount of reporting unit | 1,124 | |
Goodwill impairment loss* | $ | 86 |
*Must be less than $610 (carrying amount of goodwill).
b.
Tangible assets, net | $ | 196 |
Goodwill ($610 carrying amount $86 impairment loss) | 524 | |
Patent | 0 | |
Customer list | 0 | |
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