Determining Impairment Loss Under ASPE

question 31

Essay

Determining impairment loss under ASPE
On September 1, 2020, Humble Corporation acquired Roots Media for a cash payment of $ 859,100. At the time of purchase, Roots' statement of financial position showed assets of $ 899,600, liabilities of $ 462,300, and owner's equity of $ 437,300. The fair value of Roots' assets is estimated to be $ 1,163,900.
Instructions
a) Assuming that Humble Corporation is a private entity, explain how goodwill will be tested for impairment.
b) If the unit's carrying amount (including goodwill) is $ 3,617,400 and its fair value is $ 3,553,200, what is the impairment loss, if any, under ASPE?

---

Definitions:

Diagnosed

Identified by analyzing and investigating symptoms, usually referring to determining the nature of a disease or condition.

Conscientious

A personality trait characterized by thoroughness, carefulness, and diligence in one's work or duties.

Maladaptive

Behaviors or thought patterns that are counterproductive or hinder one’s ability to adjust healthily to situations or challenges.

Dedication

The quality of being committed to a task or purpose.