Using the data from BE12-19, assume that Luigi Corporation is a public company and that the goodwill
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Using the data from BE12-19, assume that Luigi Corporation is a public company and that the goodwill 10) was allocated entirely to one cash-generating unit (CGU). Two years later, information about the CGU is as follows: carrying amount $3,925,000; value in use $3,850,000; and fair value less costs to sell $3,450,000. Determine if the goodwill is impaired, and calculate the goodwill impairment Joss, if any.
In exercise
On September 1, 2014, Luigi Corporation acquired Edinburgh Enterprises for a cash payment of $863,000. At the time of purchase, Edinburgh's statement of financial position showed assets of $900,000, liabilities of $460,000, and owners' equity of $440,000. The fair value of Edinburgh's assets is estimated to be $1,160,000. Calculate the amount of goodwill acquired by Luigi.
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...Corporation A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Under IFRS the recoverable amount of the CGU is compared with its carrying amount to determine if ...View the full answer
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