Stanvid Company Provided the Following Information:
Fair Value of the Reporting

question 88

Essay

Stanvid Company provided the following information:
Fair value of the reporting unit, including goodwill $\quad$ $\quad$ $1,400,000
Book value of reporting unit, excluding goodwill $\quad$ $\quad$ $\quad$ $1,000,000
Add: Carrying value of goodwill $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ 600,000
Carrying value of the reporting unit, including goodwill $\quad$ $1,600,000


The qualitative assessment of goodwill is completed and it is more likely than not that goodwill is impaired. Describe the process for determining if Stanvid needs to record a goodwill impairment loss and prepare any required journal entries.

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Definitions:

Insightful

Having or showing an accurate and deep understanding; perceptive.

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a person’s mind when evaluating a specific topic, concept, method or decision.

Planning Fallacy

The tendency to underestimate the time, costs, and risks of future actions and at the same time overestimate the benefits of the same actions.

Intelligence

The ability to learn from experience, solve problems, and use knowledge to adapt to new situations.