Blue Company recently acquired three businesses, recognizing goodwill in each acquisition. Acquired goodwill was allocated to the three reporting units: Yellow, Green and Purple. Blue provides the following information in performing the 2009 annual review for impairment:
Company Carrying Value Fair Value Valuation of Reporting Unit (including goodwill)
Yellow Tangible assets $ 300,000 $ 320,000 $ 525,000
Trademark $ 20,000 $ 10,000
Licenses $ 85,000 $ 90,000
Liabilities $ 20,000 $ 20,000
Goodwill $ 130,000 ?
Green Tangible assets $ 250,000 $ 400,000 $ 450,000
Trademark $ 25,000 $ 50,000
Licenses $ 18,000 $ 18,000
Goodwill $ 140,000 ?
Purple Tangible assets $ 120,000 $ 120,000 $ 215,000
Unpatented technology $ - $ 50,000
Customer list $ 35,000 $ 45,000
Goodwill $ 75,000 ?
Required:
(A) Which of Blue's reporting units require both steps to test for goodwill impairment?
(B) How much goodwill impairment should Blue report for 2009?