On September 2020, Princes Corporation acquired Royal Mile Incorporated for a cash payment of $ 864,300. At the time of the purchase, Royal Mile's statement of financial position showed assets of $ 890,600, liabilities of $ 469,700, and owners' equity of $ 420,900. The fair value of Royal Mile's assets is estimated to be $ 1,162,900. Assume that Princes Corporation is a public company and that the goodwill was allocated entirely to one cash-generating unit (GU). Two years later, the CGU's carrying amount is $ 3,530,300, the value in use is $ 3,458,200, and the fair value less costs to sell is $ 3,058,200. Goodwill is

Question

Quizplus · Accepted Answer

The carrying amount of the CGU is $3,530,300, and the recoverable amount is the higher of the value in use ($3,458,200) and the fair value less costs to sell ($3,058,200), which is $3,458,200. The impairment loss is the difference between the carrying amount and the recoverable amount: $3,530,300 - $3,458,200 = $72,100.

On September 2020, Princes Corporation Acquired Royal Mile Incorporated for a Cash