Question

In 2018, Martin Corp. acquired Glynco and recorded goodwill of $117 million. Martin considers Glynco a separate reporting unit. By the end of 2021, the net assets (including goodwill) of Glynco are $337 million and its estimated fair value is $290 million. The amount of the impairment loss that Martin would record for goodwill at the end of 2021 is:

Answer 1

The amount of impairment loss attributable to goodwill is the actual impairment loss of $47 million

Step-by-step explanation:

The impairment loss =Carrying value -fair value

carrying value is $337 million

fair value is $290 million

the impairment loss=$337 million-$290 million

=$47 million

The amount of the impairment loss that would recorded for goodwill at end of 2021 is $47 million,hence the balance of goodwill would be $70 million($117-$47)

Answer 2

$60 million

Step-by-step explanation:

Given:

In 2021:

• net assets: $337 million
• fair value is $290 million

In this case, we have to find the amount of the impairment loss that Martin would record for goodwill at the end of 2021. As we know the difference between carrying value and the fair value of machinery is the loss on impairment of the asset.

= $320 million - $260 million

= $60 million

Hope it will find you well.