Alomar Co., a consolidated enterprise, conducted an impairment review for each of its reporting units. In its qualitative assessment, one particular reporting unit, Sellers, emerged as a candidate for possible goodwill impairment. Sellers had recognized net assets with carrying amounts totaling $780, including goodwill of $500. Seller's reporting unit fair value is assessed at $650 and includes two internally developed unrecognized intangible assets (a patent and a customer list with fair values of $150 and $50, respectively). The following table summarizes current financial information for the Sellers reporting unit: Tangible assets, net Recognized intangible assets, net Goodwill Unrecognized intangible assets a. Goodwill impairment loss b. Tangible assets, net Goodwill Patent Customer list Carrying Amounts Amounts $80 200 500 0 a. Determine the amount of any goodwill impairment for Alomar's Sellers reporting unit. b. After recognition of any goodwill impairment loss, what are the reported carrying amounts for the following assets of Alomar's reporting unit Sellers? Fair Values $110 230 ? 200

Alomar Co., a consolidated enterprise, conducted an impairment review for each of its reporting units. In its qualitative assessment, one particular reporting unit, Sellers, emerged as a candidate for possible goodwill impairment. Sellers had recognized net assets with carrying amounts totaling $780, including goodwill of $500. Seller's reporting unit fair value is assessed at $650 and includes two internally developed unrecognized intangible assets (a patent and a customer list with fair values of $150 and $50, respectively). The following table summarizes current financial information for the Sellers reporting unit: Tangible assets, net Recognized intangible assets, net Goodwill Unrecognized intangible assets a. Goodwill impairment loss b. Tangible assets, net Goodwill Patent Customer list Carrying Amounts Amounts $80 200 500 0 a. Determine the amount of any goodwill impairment for Alomar's Sellers reporting unit. b. After recognition of any goodwill impairment loss, what are the reported carrying amounts for the following assets of Alomar's reporting unit Sellers? Fair Values $110 230 ? 200

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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FASB recently issued a Proposed Accounting Standard Update on impairment for intangible assets. What is the primary purpose for FASB to issue Proposed Accounting Standards Updates?
On July 1, 2020, Sheffield Ltd., a publicly listed company, acquired assets from Bramble Ltd. On the transaction date, a reliable, independent valuator assessed the fair values of these assets as follows: Manufacturing plant (building #1) $399,580 Storage warehouse (building #2) 209,940 Machinery (in building #1) 74,700 Machinery (in building #2) 45,000 The buildings are owned by the company, and the land that the buildings are situated on is owned by the local municipality and is provided free of charge to the owner of the buildings to encourage local employment.In exchange for the acquisition of these assets, Sheffield issued 145,750 common shares. Sheffield’s shares are thinly traded (that is, traded in relatively low volume leading to more volatile price changes than most public companies). In the most recent sale of Sheffield’s shares on the Toronto Stock Exchange, 510 shares were sold for $5 per share. At the time of acquisition, both buildings were…
A-7
On July 1, 2020, Sheffield Ltd., a publicly listed company, acquired assets from Bramble Ltd. On the transaction date, a reliable, independent valuator assessed the fair values of these assets as follows: Manufacturing plant (building #1) $399,580 Storage warehouse (building #2) 209,940 Machinery (in building #1) 74,700 Machinery (in building #2) 45,000 The buildings are owned by the company, and the land that the buildings are situated on is owned by the local municipality and is provided free of charge to the owner of the buildings to encourage local employment.In exchange for the acquisition of these assets, Sheffield issued 145,750 common shares. Sheffield’s shares are thinly traded (that is, traded in relatively low volume leading to more volatile price changes than most public companies). In the most recent sale of Sheffield’s shares on the Toronto Stock Exchange, 510 shares were sold for $5 per share. At the time of acquisition, both buildings…