Assume that Sun, Inc. had identified a potential write-down of at least $1.8 billion related to a

Question:

Assume that Sun, Inc. had identified a potential write-down of at least $1.8 billion related to a reporting unit.
a. What is a reporting unit? How does Sun determine what constitutes a reporting unit for the purpose of determining a impairment?
b. Explain how the market value of the firm as a whole influences the need to recognize an impairment of .
c. Assume that the reporting unit was the storage solutions unit.
While the past year's results have been poor, management maintains that it has developed significant new products that repositions the company to take a leadership role in storage solutions and that it expects significant improvement in results starting in the following year. Outline the major elements of an audit program to determine whether there is a impairment, and if there is, the extent of the impairment.

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...