Question

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 $1,220, including goodwill of $725. Seller’s reporting unit fair value is assessed at $1,124 and includes two internally developed unrecognized intangible assets (a patent and a customer list with fair values of $274 and $79, respectively). The following table summarizes current financial information for the Sellers reporting unit:

	Carrying Amounts		Fair Values
Tangible assets, net	$142		$222
Recognized intangible assets, net	353		384
Goodwill	725		?
Unrecognized intangible assets	0		353

1. Determine the amount of any goodwill impairment for Alomar’s Sellers reporting unit.

2. After recognition of any goodwill impairment loss, what are the reported carrying amounts for the following assets of Alomar’s reporting unit Sellers?

Answer 1

1.

Determine the amount of any goodwill impairment for Alomar’s Sellers reporting unit:

Impairment Loss	=	Carrying Value	-	Fair Value
	=	$725	-	?

Compute fair value goodwill:

Total Fair Value		$1,124
Less:
Total Assets, net	$222
Recognized intangible assets, net	$384
Unrecognized intangible assets	$353	$959
Goodwill fair value		$165

Impairment Loss	=	Carrying Value	-	Fair Value
	=	$725	-	$165
	=	$560

__________________________________________________

After recognition of any goodwill impairment loss, what are the reported carrying amounts for the following assets of Alomar’s reporting unit Sellers

Tangible assets, net	$142
Goodwill	$165
Patent	$0
Customer list	$0