Assume that the equity method Equity Investment account relating to a subsidiary has a reported balance of
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Question:
Assume that the equity method Equity Investment account relating to a subsidiary has a reported balance of $6,250,000, including a carrying value of goodwill of $619,000. You currently value that subsidiary at $5,625,000, and estimate that the fair value of the subsidiary’s net assets, other than goodwill, is $5,375,000.
Write a paper about the following:
- The steps required in assessing for goodwill impairment.
- The determination if the above scenario indicates that goodwill is impaired (showing all work).
- The required journal entries if indeed there is goodwill impairment.
Related Book For
Quantitative Investment Analysis
ISBN: 978-1119104223
3rd edition
Authors: Richard A. DeFusco, Dennis W. McLeavey, Jerald E. Pinto, David E. Runkle
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