International Foods, a U.S. company, acquired two companies in 2013. As a result, its consolidated financial statements include the following acquired intangibles:
| Intangible Asset | Date of Acquisition | Fair Value at Date of Acquisition | Useful Life |
|---|---|---|---|
| Customer relationships | January 1, 2013 | $3,200,000 | 10 years |
| Favorable leaseholds | June 30, 2013 | 4,800,000 | 12 years |
| Brand names | June 30, 2013 | 14,400,000 | Indefinite |
| Goodwill | January 1, 2013 | 400,000,000 | Indefinite |
Goodwill was assigned to the following reporting units:
| Asia | $80,000,000 |
| South America | 120,000,000 |
| Europe | 200,000,000 |
| Total | $400,000,000 |
It is now December 31, 2014, the end of International Foods’ accounting year. No impairment losses were reported on any intangibles in 2013. Assume that International Foods bypasses step 0 of the goodwill impairment test. The following information is available on December 31,2014:
| Intangible Asset | Sum of Future Expected Undiscounted Cash Flows | Sum of Future Expected Discounted Cash Flows |
|---|---|---|
| Customer relationships | $960,000 | $720,000 |
| Favorable leaseholds | 4,800,000 | 3,520,000 |
| Brand names | 11,200,000 | 5,600,000 |
| Reporting Unit | Unit Carrying Value | Unit Fair Value | Fair Value of Identifiable Net Assets |
|---|---|---|---|
| Asia | $240,000,000 | $320,000,000 | $300,000,000 |
| South America | 160,000,000 | 280,000,000 | 224,000,000 |
| Europe | 480,000,000 | 400,000,000 | 308,000,000 |
Compute 2014 amortization expense and impairment losses on the above intangibles, following U.S. GAAP.
| Summary: | |
|---|---|
| Amortization expense – identifiable intangibles | |
| Impairment losses – identifiable intangibles | |
| Goodwill impairment loss | |
| Total |
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