PR Company pays $10,000 in cash and issues no-par stock with a fair value of $40,000 to acquire all of SX Corporations net assets. SXs balance sheet at the date of acquisition is as follows:

	SX Corporation
	Book value	Fair value
Current assets	$ 2,000	$ 4,200
Property, plant & equipment, net	10,000	6,000
Identifiable intangible assets	4,000	14,000
Total assets	$16,000
Current liabilities	$ 1,600	$ 2,000
Long-term debt	12,000	11,600
Capital stock	5,000
Retained earnings	8,000
Accumulated other comprehensive income	(1,000)
Treasury stock	(9,600)
Total liabilities & equity	$16,000

PRs consultants find these items that are not reported on SXs balance sheet:

	Fair value
Potential contracts with new customers	$ 8,000
Advanced production technology	4,000
Future cost savings	2,000
Customer lists	1,000

Outside consultants are paid $200 in cash, and registration fees to issue PRs new stock are $400. The question below relates to the entry or entries PR makes to record the acquisition on its books.

Three months after the acquisition, PR receives information revealing that the identifiable intangible assets reported on SXs books at the date of acquisition were really worth $12,000 instead of $14,000. How does PR report this information? Ignore amortization.

Loss of $2,000, reported on the income statement

$2,000 decrease in goodwill

$2,000 increase in goodwill

Not reported