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23 September, 01:08

In 2015, Antle Inc. had acquired Demski Co. and recorded goodwill of $320 million as a result. The net assets (including goodwill) from Antle's acquisition of Demski Co. had a 2016 year-end book value of $655 million. Antle assessed the fair value of Demski at this date to be $775 million, while the fair value of all of Demski's identifiable tangible and intangible assets (excluding goodwill) was $712 million. The amount of the impairment loss that Antle would record for goodwill at the end of 2016 is:

A. None of these answer choices are correct.

B. 63 million

C. 0

D. 257 million

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Answers (1)
  1. 23 September, 01:32
    0
    Option (C) 0

    Explanation:

    Data provided in the question:

    Recorded goodwill = $320 million

    Year-end book value = $655 million

    Fair value of Demski at this date = $775 million

    Demski's identifiable tangible and intangible assets (excluding goodwill) = $712 million

    Now,

    The fair value of Demski's Company i. e $775 million is greater than the recorded book value on 2016 year-end.

    Hence,

    No impairment loss will be recorded by Antle's Company for goodwill at the end of 2016.

    Therefore,

    Option (C) 0
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