In 2015, a company purchased a small business for $250,000. The market value of the small business's assets was $400,000, and the market value of the liabilities was $200,000. The company recorded goodwill of $50,000 at the time of acquisition. At the end of 2016, it measured the goodwill and found it had a remaining fair value of only $20,000. At year-end 2016, the company will:

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The company will need to record an impairment loss to reflect the decrease in the fair value of goodwill from $50,000 to $20,000. This decrease in value represents a permanent loss in value, which is why an impairment loss must be recorded. Choices A, C, and D do not accurately reflect the situation.

In 2015, a Company Purchased a Small Business for $250,000