Goodwill Impairment Assignment
Goodwill Impairment Test L03 On January 1, 2010, Porsche Company acquired the net assets of Saab Company for $450,000 cash. The fair value of Saab's identifiable net assets was $375,000 on this date, Porsche Com pany decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (Saab).
The information for these subsequent years is as follows: Carrying Value of Present Value Saab's Identifiable Year of Future Cash Flows Nd Assets 2011 $400,000 $390,000 2012 $400,000 $920,000 $300,000 $350,000 2013 • Identifiable net assets do not include goodwill Fair Value Saab's Identifiable Nd Assets $340,000 345,000 325,000 Required: Port A: For each year determine the amount of goodwill impairment, if any. Part B Prepare the journal entries needed each year to record the goodwill impairment (if any) on Porsche's books from 2011 to 2013 Part How should goodwill (and its impairment) be prescribed on the balance sheet and the income statement in each year? Part D. If goodwill is impaired, what additional information needs to be disclosed. .