The following paragraph comes from Starbucks Accounting Policies note in their most recent annual report (see question 2):

Preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Examples include, but are not limited to, estimates for inventory reserves, asset and goodwill impairments, assumptions underlying self-insurance reserves, income from unredeemed stored value cards, stock-based compensation forfeiture rates, future asset retirement obligations and the potential outcome of future tax consequences of events that have been recognized in the financial statements. Actual results and outcomes may differ from these estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the global COVID-19 pandemic.

Required: Answer each of the following questions

1. Starbucks records Goodwill when it purchases another company for an amount in excess of the fair market value of that companys identifiable assets. Briefly explain in your own words what would cause Starbucks to recognize a Goodwill impairment. Based on what you know about Starbucks and the US economy, does an impairment seem likely as of June 2023? Explain your reasoning.
2. Under what circumstances would Starbucks recognize revenue from unredeemed stored value cards? When Starbucks sells a stored value card, they increase cash and an unearned revenue account (a liability). When the card is used, they reduce the unearned revenue and increase revenue.