Purchase Company recently acquired several businesses and recognized goodwill in each acquisition. Purchase has allocated the resulting goodwill to its three reporting units: RU-1, RU-2, and RU-3. Purchase opts to skip the qualitative assessment and therefore performs a quantitative goodwill impairment review annually. In its current-year assessment of goodwill, Purchase provides the following individual asset and liability carrying amounts for each of its reporting units: Carrying Amounts RU-1 RU-2 RU-3 Tangible assets $180,000 $200,000 $140,000 Trademark 170,000 Customer list 90,000 Unpatented technology 170,000 Licenses 90,000 Copyrights 50,000 Goodwill 120,000 150,000 90,000 Liabilities (30,000) The total fair values for each reporting unit (including goodwill) are $510,000 for RU-1, $580,000 for RU-2, and $560,000 for RU-3. To date, Purchase has reported no goodwill impairments. How much goodwill impairment should Purchase report this year for each of its reporting units?
Purchase Company recently acquired several businesses and recognized goodwill in each acquisition. Purchase has allocated the resulting goodwill to its three reporting units: RU-1, RU-2, and RU-3. Purchase opts to skip the qualitative assessment and therefore performs a quantitative goodwill impairment review annually. In its current-year assessment of goodwill, Purchase provides the following individual asset and liability carrying amounts for each of its reporting units: Carrying Amounts RU-1 RU-2 RU-3 Tangible assets $180,000 $200,000 $140,000 Trademark 170,000 Customer list 90,000 Unpatented technology 170,000 Licenses 90,000 Copyrights 50,000 Goodwill 120,000 150,000 90,000 Liabilities (30,000) The total fair values for each reporting unit (including goodwill) are $510,000 for RU-1, $580,000 for RU-2, and $560,000 for RU-3. To date, Purchase has reported no goodwill impairments. How much goodwill impairment should Purchase report this year for each of its reporting units?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Purchase Company recently acquired several businesses and recognized
In its current-year assessment of goodwill, Purchase provides the following individual asset and liability carrying amounts for each of its reporting units:
| Carrying Amounts | |||
| RU-1 | RU-2 | RU-3 | |
| Tangible assets | $180,000 | $200,000 | $140,000 |
| Trademark | 170,000 | ||
| Customer list | 90,000 | ||
| Unpatented technology | 170,000 | ||
| Licenses | 90,000 | ||
| Copyrights | 50,000 | ||
| Goodwill | 120,000 | 150,000 | 90,000 |
| Liabilities | (30,000) | ||
The total fair values for each reporting unit (including goodwill) are $510,000 for RU-1, $580,000 for RU-2, and $560,000 for RU-3. To date, Purchase has reported no goodwill impairments.
How much goodwill impairment should Purchase report this year for each of its reporting units?
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