Question

The fair value of net identifiable assets exclusive of goodwill of a reporting unit of X...

The fair value of net identifiable assets exclusive of goodwill of a reporting unit of X Company is $285,000. On X Company's books, the carrying value of this reporting unit's net assets is $330,000, which includes $20,000 goodwill. If the fair value of the reporting unit is $300,000, what amount of goodwill impairment will be recognized for this unit? Please show the work.

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Answer #1

Impairment of goodwill is when the fair market value of the acquired company decreases then the value at the time when it was purchased then there arises an impairment of goodwill.

The impairment value of goodwill is$5,000

Calculation of how the amounts where derived above is given as follows

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