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.