Question: In 2011 Alliant Corporation acquired Centerpoint Inc for 300 million

In 2011, Alliant Corporation acquired Centerpoint Inc. for $300 million, of which $50 million was allocated to goodwill. At the end of 2013, management has provided the following information for a required goodwill impairment test:
Fair value of Centerpoint, Inc. .............. $220 million
Fair value of Centerpoint’s net assets (excluding goodwill) .... 200 million
Book value of Centerpoint’s net assets (including goodwill) ... 250 million

1. Determine the amount of the impairment loss.
2. Repeat requirement 1 assuming that the fair value of Centerpoint is $270 million.

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  • CreatedDecember 23, 2013
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