Harms acquires Blake on January 1, 2011, for $1,000,000. The amount of $800,000 is assigned to identifiable

Question:

Harms acquires Blake on January 1, 2011, for $1,000,000. The amount of $800,000 is assigned to identifiable net assets. Goodwill is being impairment tested on December 31, 2015. There have not been any prior impairment adjustments. The following values apply on that date:

Estimated fair value of the Blake operating unit..................... $1,200,000

Fair value of net identifiable assets (excluding goodwill) ........ 1,120,000

Book value of net identifiable assets (including goodwill) ........ 1,250,000

The book values include those resulting from assignment of fair value to accounts included in the January 1, 2011, acquisition.

Is goodwill impaired? If it is, what is the amount of the impairment adjustment?

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...