1. (TCO C) Sheahan Company recently acquired three businesses, recognizing goodwill in each acquisition. Acquired goodwill was allocated to the three reporting units: Penny, Nickel, and Dime. Sheahan provides the following information in performing the 2012 annual review for impairment:
|
Carrying Value |
Fair Value |
Valuation of Reporting Unit (including Goodwill) |
||
|
Penny |
Tangible Assets |
$200,000 |
$225,000 |
$365,000 |
|
Trademarks |
15,000 |
10,000 |
||
|
Licenses |
62,000 |
75,000 |
||
|
Liabilities |
17,000 |
17,000 |
||
|
Goodwill |
85,000 |
? |
||
|
Nickel |
Tangible Assets |
$185,000 |
$345,000 |
$330,000 |
|
Trademarks |
20,000 |
35,000 |
||
|
Licenses |
22,000 |
22,000 |
||
|
Goodwill |
137,000 |
? |
||
|
Dime |
Tangible Assets |
$95,000 |
$95,000 |
$185,000 |
|
Unpatented Technology |
0 |
35,000 |
||
|
Customer List |
44,000 |
44,000 |
||
|
Goodwill |
655,000 |
? |
Required:
(A) Which of Sheahan’s reporting units require both steps to test for goodwill impairment??
(B) How much goodwill impairment should Sheahan report for 2012?