Wolf Pack Transport Co. has a 25 percent equity investment in Maggie Valley Depot (MVD), Inc., which owns and operates a warehousing facility used for the collection and redistribution of various consumer goods. Wolf Pack paid $1,685,000 for MVD several years ago, including a $300,000 allocation for goodwill as the only excess cost over book value acquired. Wolf Pack Transport has since appropriately applied the equity method to account for the investment in its internal and external financial reports. In its most recent balance sheet, because of recognized profits in excess of dividends since the acquisition, Wolf Pack reported a $2,350,000 amount for its Investment in Maggie Valley Depot, Inc., account.
However, competition in the transit warehousing industry has increased in the past 12 months. In the same area as the MVD facility, a competitor company opened two additional warehouses that are much more conveniently located near a major interstate highway. MVD's revenues declined 30 percent as customers shifted their business to the competitor's facilities and the prices for warehouse services declined. The market value of Wolf Pack's stock ownership in MVD fell to $1,700,000 from a high last year of $2,500,000. MVD's management is currently debating ways to respond to these events but has yet to formulate a firm plan.

Required
1. What guidance does the FASB ASC provide for equity method investment losses in value?
2. Should Wolf Pack recognize the decline in the value of its holdings in MVD in its current year financial statements?
3. Should Wolf Pack test for impairment of the value it had initially assigned to goodwill?