Answer:
Ivanhoe Corporation
The amount of loss on impairment of goodwill that Ivanhoe should record in 2018 is:
$518,000.
Explanation:
a) Data and Calculations:
Goodwill on acquisition = $1,220,000
December 31, 2018:
Fair value of Investee (End-of-the-World Products Division) = $5,540,000
The fair value of the net identifiable assets of the Division (excluding goodwill) = $4,838,000
Goodwill = $702,000 ($5,540,000 - $4,838,000)
Impairment loss = $518,000 ($1,220,000 - $702,000)
b) A Goodwill impairment loss is the recognized reduction in the carrying amount of this intangible asset that is triggered by a decline in its fair value. When the fair value of acquired Goodwill declines below its carrying amount, Ivanhoe Corporation is expected to write off the difference (the impairment loss) in its income statement for 2018.
