Information regarding impairment of goodwill that specifically concerns Simon relates to the 2016 acquisition of Pizazz, Inc.

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Question:

Information regarding impairment of goodwill that specifically concerns Simon relates to the 2016 acquisition of Pizazz, Inc. (a leading US manufacturer of hair color products), resulting in Salon Solutions recording $125 million of goodwill related to this acquisition. . Pizazz A.Ş. continues its activities as a separate company after the acquisition and is accepted as a reporting unit. At the end of 2017, events and circumstances indicated that Pizazz's fair value was "more likely than not" to be less than its book value. Simon identified the following information regarding Pizazz:

As of December 31, 17, the book value of Pizazz's net assets was $560 million, including $125 million in goodwill. of Pizazz on 31.12. As of 17, the estimated fair value is $445 million, and the fair value of all identifiable tangible and intangible assets, excluding goodwill, is estimated to be $425 million. These estimates were based on the prices of comparable businesses. Your firm has delegated the task of determining the treatment for goodwill impairment to you.

Required:

1. What are the current standards governing the good faith treatment of US GAAP?

2. What are the current standards governing the US GAAP treatment of goodwill impairment and how to determine the amount of goodwill impairment loss using the data from Salon Solutions provided above.

3. Prepare the journal entry to record the impairment loss and explain how this loss is reported in the income statement (ignoring the income tax implications). In addition, if an impairment loss is recognized, indicate the amount of goodwill to be reported in the statement of financial position as of December 31, 2017.

3. Whether early application of Financial Accounting Standards Board Accounting Standards Update (FASB ASU) 2017-04 is permitted and, if so, how to determine the amount of goodwill impairment loss based on early application of FASB ASU 2017-04 goodwill data. Also, prepare the journal entry to record the impairment loss per FASB ASU 2017-04, if any, in case the owner of Salon Solution chooses to adopt FASB ASU 2017-04 early. In addition, if an impairment loss is recognized, indicate the amount of goodwill to be reported in the statement of financial position as of December 31, 2017.

4. Required financial statement note disclosures for goodwill impairment, assuming that the President of Salon Solution has chosen to adopt FASB ASU 2017-04 early (ignore income tax implications).