Sam SE acquires Roy SE for a total price of €9.8 million on 1 April 2017. Both firms report under IFRS. Below are the identifiable assets and liabilities of Roy SE at the moment of acquisition:

Copyrights Machinery Buildings Land

Debt obligations

Amounts in 1,000 € 1,200 1,700 2,800 5,400 2,300

An external professional firm determined at this moment that all assets are fairly valued except for: one machinery (which has a book value of €30,000 but a fair value of €45,000), and one building (which has a book value of €95,000 but a fair value of €80,000). There are €29,000 legal costs to close the acquisition deal.

At the end of accounting period (31 March 2018), Sam’s CFO determines that the updated recoverable amount of the consideration is €9.1 million. The carrying amount of net identifiable assets – excluding any goodwill – has remained unchanged.

Required: 

Prepare the journal entry for goodwill impairment, if necessary.

Answer rating: 100% (QA)

Answer Purchase Consideration 98 million 01 Apr 2017 I... View the full answer