Solution Part a) No impairmnet has occurred as recoverable amount is more than carrying value. No impairment entry. Part b) Impairment entry: .

1. FRS12-
8.
Waters Corporation purchased Johnson Company 3 years ago and at that time recorded
goodwill of $400,000. The Johnson Division's net assets, including the goodwill, have
a carrying amount of $800,000. The recoverable amount of the division is estimated to
be $1,000,000. Prepare Waters' journal entry, if necessary, to record impairment of the
goodwill.
Use the information provided in IFRS12-8. Assume that the recoverable amount of the division
is estimated to be $750,000. Prepare Waters' journal entry, if necessary, to record impairment of
the goodwill.
FRS12-
8.
Waters Corporation purchased Johnson Company 3 years ago and at that time recorded
goodwill of $400,000. The Johnson Division's net assets, including the goodwill, have
a carrying amount of $800,000. The recoverable amount of the division is estimated to
be $1,000,000. Prepare Waters' journal entry, if necessary, to record impairment of the
goodwill.
Solution
Part a) No impairmnet has occurred as recoverable amount is more than carrying value.
No impairment entry.
Part b) Impairment entry:
Date Particulars Amount(Dr) Amount (Cr)
xx Impairment loss 50000
Goodwill 50000