Chapter 11, Problem 14CPA

To determine

Goodwill:

Goodwill is an intangible asset. It is defined as the excess of cost of an acquired company over the fair value of its net assets. Net assets are the difference between the total assets and the total liabilities. The value of the goodwill is the unique features of the company such as the location of the company, its efficient employees, and its reputation, which cannot be associated with any specific asset of the Company.

Impairment of Goodwill:

It is a situation that arises when the carrying value of the goodwill listed on the acquired company’s balance sheet, exceeds its fair market value.

To Determine: The amount of the goodwill impairment loss, which Corporation B should recognize.