Read the Case of Goodwill Impairment at Jackson Enterprises. After reading the case study, answer the questions provided.

Financial reporting personnel at Jackson Enterprises (JE) are in the process of completing year-end activities, including necessary adjusting of entries to the consolidated financial statements. While JE has not previously believed it necessary to adjust its recognized goodwill from the Dynamic and ZD acquisitions, the valuation of goodwill is, nonetheless, a prominent concern in the closing process. Assume you are asked to research the financial statement issues surrounding the goodwill recorded for the Dynamic and ZD subsidiaries.

1. Beyond the assessment of qualitative factors, what other evidence should be considered for the purposes of the analysis? What does this information suggest? With respect to Dynamic, what do you think is the most appropriate fair value amount to use in assessing the fair value of this reporting unit? Explain. Why is this important?