In 2016 Alliant Corporation acquired Centerpoint Inc for 339

In 2016, Alliant Corporation acquired Centerpoint Inc. for $339 million, of which $59 million was allocated to goodwill. At the end of 2018, management has provided the following information for a required goodwill impairment test:

Required:
1. Determine the amount of the impairment loss.
2. Determine the amount of the impairment loss assuming that the fair value of Centerpoint is $306 million.

(For all requirements, Enter your answer in millions (i.e., 10,000,000 should be entered as 10)).

Solution

case 1:

first let us know the implied value of goodwill:

now,

case 2:

here, the fair value ($306million) is greater than book value ($280 million) ,so there is no impairment of good will.