After the entity recognizes the goodwill impairment loss, the carrying amount of the electronics reporting unit is as follows:

The electronics reporting unit fails step one of the goodwill impairment test because the fair value of the reporting unit has declined, and step two results in a $100 goodwill impairment loss. Prior to testing the electronics reporting unit’s goodwill for impairment, Company A determines that the carrying amounts of the unit’s other assets do not require adjustment under other applicable GAAP (e.g., ASC 350 and ASC 360-10) including testing the European electronics business under the held-and-used model. Therefore, Company A tests the entire electronics reporting unit’s goodwill for impairment during May 20X2. Based on this event, while Company A’s management has not yet committed to a plan to sell the European electronics business, it determines that it is more likely than not that it will sell the European electronics business within the next year and that the fair value of the electronics reporting unit may no longer exceed the unit’s carrying amount. In May 20X2, the European electronics business loses one of its significant customers. Geographic proximity (potentially indicating shared services and market operations).Expected integration plans and synergies underlying the original acquisition.Joint marketing efforts between the acquired business and the parent or other businesses owned by the parent.Extent of any corporate level services provided to the acquired business by the parent.amongst the acquired business and the parent Level of shared customers, shared customer lists, customer referrals, etc.Length of time between the acquisition date and the subsequent disposal.Level of management interaction between the acquired business and its parent.The following factors are helpful when determining whether some level of integration has occurred: The determination of whether the business to be disposed of has never been integrated largely depends on the specific facts and circumstances and requires significant judgment. However, these situations occur infrequently because some amount of integration generally occurs after an acquisition. Instead, the original goodwill amount associated with that business should be included when determining the gain or loss on disposal. In that case, goodwill associated with the nonintegrated business would not be included in a relative fair value calculation. This situation might occur when the acquired business is operated as a standalone entity or when the business is to be disposed of shortly after it is acquired. If, however, the business that is to be disposed of was never integrated into the reporting unit after its acquisition and thus the rest of the reporting unit never realized the benefits of the acquired goodwill, the relative fair value allocation approach is not used. In accordance with ASC 350-20-40-3, the amount of goodwill that is attributed to the business should be based on the relative fair values of (1) that business and (2) the portion of the reporting unit that will be retained. If, on the other hand, the net assets that are to be disposed of do constitute a business, the entity should attribute a portion of the reporting unit’s goodwill to that business in determining the gain or loss on the disposal of the business. If the net assets that are to be disposed of do not constitute a business, no goodwill should be attributed to those net assets. When some, but not all, of a reporting unit is to be disposed of, the accounting for that reporting unit’s goodwill will depend on whether the net assets that are to be disposed of constitute a business. When a reporting unit is to be disposed of in its entirety, the entity must include in the reporting unit’s carrying amount the goodwill of that reporting unit in determining the gain or loss on disposal. Transfers and servicing of financial assets Revenue from contracts with customers (ASC 606) Loans and investments (post ASU 2016-13 and ASC 326) Investments in debt and equity securities (pre ASU 2016-13) Insurance contracts for insurance entities (pre ASU 2018-12) Insurance contracts for insurance entities (post ASU 2018-12) IFRS and US GAAP: Similarities and differences Business combinations and noncontrolling interestsĮquity method investments and joint ventures

Journal entries to writedown goodwill