Porter Corporation acquired Stewart Corporation on January 1, 2020, at a cost of $180 million.
Need help solving P4.6 parts a & b:
Chapter 4 - Consolidated Financial Statements Subsequent to Acquisition Goodwill Allocation and Impairment Testing Porter Corporation acquired Stewart C on January 1, 2020, at a cost of $180 million. Stewart has three reporting units, Networks. vices, and Mobile Broadband. In addition, one of Porter's reporting units, U.S. Cellular, bene U.S. Cellular is expected to increase in value by $10 million because of the acquisition. Assume qualitative assessment at December 31, 2020, indicates that it is more likely than to ness suffered a downturn during 2020, the year-end impairment review yielded the following informats Impairment reviews at the end of 2018 and 2019 did not identify any impairment losses. After the bus the acquisition. Relevant data are as follows at the date of acquisition (in millions): book value exceeds fair value for all reporting units. On December 31, 2020, the following amous 1. Customer lists are estimated to have undiscounted future cash flows of $250,000 and discount 176 LO 3 P4.6 Global Services Mobile Broadowana Networks $50 35 55 $250 190 85 $125 100 n Identifiable assets. Liabilities........... Fair value of unit estimated for a quantitative analysis of goodwill impairment (in millions): Global Services Mobile Broadband U.S. Cellular Networks $50 48 $90 92 $25 33 $ 95 100 Fair value of unit Book value of unit. In your answers below, show all numbers in millions. Required Calculate the total goodwill for this acquisition, and its allocation to the four reporting units at Jata Calculate any goodwill impairment for 2020, following U.S. GAAP. Intangible Assets and Goodwill: Amortization and Impairment In early 2018, Bowen Con pany acquired a new business unit in a merger. Allocation of the acquisition cost resulted in fair valve assigned as follows: 1, 2020. b. LO 2, 3 P4.7 Intangible asset Fair value Estimated life Customer lists Developed technology Internet domain name Goodwill... $ 500,000 800,000 1,300,000 6,200,000 5 years 10 years Indefinite Indefinite The goodwill is assigned entirely to the acquired business unit. future cash flows of $180,000. 2. Developed technology is estimated to have undiscount counted future cash flows of $420.000 3. The internet Chapter 4 - Consolidated Financial Statements Subsequent to Acquisition Goodwill Allocation and Impairment Testing Porter Corporation acquired Stewart C on January 1, 2020, at a cost of $180 million. Stewart has three reporting units, Networks. vices, and Mobile Broadband. In addition, one of Porter's reporting units, U.S. Cellular, bene U.S. Cellular is expected to increase in value by $10 million because of the acquisition. Assume qualitative assessment at December 31, 2020, indicates that it is more likely than to ness suffered a downturn during 2020, the year-end impairment review yielded the following informats Impairment reviews at the end of 2018 and 2019 did not identify any impairment losses. After the bus the acquisition. Relevant data are as follows at the date of acquisition (in millions): book value exceeds fair value for all reporting units. On December 31, 2020, the following amous 1. Customer lists are estimated to have undiscounted future cash flows of $250,000 and discount 176 LO 3 P4.6 Global Services Mobile Broadowana Networks $50 35 55 $250 190 85 $125 100 n Identifiable assets. Liabilities........... Fair value of unit estimated for a quantitative analysis of goodwill impairment (in millions): Global Services Mobile Broadband U.S. Cellular Networks $50 48 $90 92 $25 33 $ 95 100 Fair value of unit Book value of unit. In your answers below, show all numbers in millions. Required Calculate the total goodwill for this acquisition, and its allocation to the four reporting units at Jata Calculate any goodwill impairment for 2020, following U.S. GAAP. Intangible Assets and Goodwill: Amortization and Impairment In early 2018, Bowen Con pany acquired a new business unit in a merger. Allocation of the acquisition cost resulted in fair valve assigned as follows: 1, 2020. b. LO 2, 3 P4.7 Intangible asset Fair value Estimated life Customer lists Developed technology Internet domain name Goodwill... $ 500,000 800,000 1,300,000 6,200,000 5 years 10 years Indefinite Indefinite The goodwill is assigned entirely to the acquired business unit. future cash flows of $180,000. 2. Developed technology is estimated to have undiscount counted future cash flows of $420.000 3. The internet
