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Determine the amount of goodwill impairment loss

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Reference no: EM132103099

Question - On May 28, 2016, Pesky Corporation acquired all of the outstanding common stock of Harman, Inc., for $530 million. The fair value of Harman's identifiable tangible and intangible assets totaled $589 million, and the fair value of liabilities assumed by Pesky was $163 million.

Pesky performed a goodwill impairment test at the end of its fiscal year ended December 31, 2016. Management has provided the following information:

Fair value of Harman, Inc. $ 510 million

Fair value of Harman's net assets (excluding goodwill) 450 million

Book value of Harman's net assets (including goodwill) 522 million

Required:

1. Determine the amount of goodwill that resulted from the Harman acquisition.

2. Determine the amount of goodwill impairment loss that Pesky should recognize at the end of 2016, if any.

3. If an impairment loss is required, prepare the journal entry to record the loss.

Reference no: EM132103099

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