Question: destin company recently acquired several businesses and recognized goodwill in...
Destin Company recently acquired several businesses and recognized goodwill in each acquisition. Destin has allocated the resulting goodwill to its three reporting units: Sand Dollar, Salty Dog, and Baytowne. Destin opts to skip the qualitative assessment and therefore performs a quantitative goodwill impairment review annually.
In its current year assessment of goodwill, Destin provides the following individual asset and liability values for each reporting unit:
|Carrying Amounts||Fair Values|
The fair values for each reporting unit (including goodwill) are $678,350 for Sand Dollar, $777,350 for Salty Dog, and $759,050 for Baytowne. To date, Destin has reported no goodwill impairments.
Determine which of Destin’s reporting units require both steps to test for goodwill impairment.
How much goodwill impairment should Destin report this year?