The new value for estimated goodwill is $1,200 (= $3,200 - $2,000). The goodwill originally recorded is $1,500 (= $4,000 - $2,000 - $500). The impairment loss is the decline in goodwill, or $300 (= $1,500 - $1,200). A company reported $6 million of goodwill in last year's statement of financial position.
If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized for the amount of the excess. a. The amount of loss recognized cannot exceed the carrying amount of the goodwill.
Goodwill is the excess of the fair market value of the entity as a whole over the fair market value of its identifiable assets. Goodwill A. Goodwill is the only intangible asset that is not identifiable.
Goodwill has an indefinite life because the going concern concept assumes that, in the absence of evidence to the contrary, the combined entity (acquirer and acquiree) will continue indefinitely. Goodwill B. Goodwill is recognized only when a buyer firm (the acquirer) obtains control of another enterprise.