Goodwill [WLOs: 1, 2, 3, 4, 5, 6] [CLOs: 1, 2, 3, 4, 5]
Prior to beginning work on this discussion forum, read Chapters 3 and 4 of the text.
Write: Make sure your response addressing the following questions is more than 200 words and that you include a brief paraphrase or direct quote from the reading material where appropriate. Include proper in-text citations for each paraphrase or direct quote as shown in the UAGC Writing Center’s Citing Within Your Paper (Links to an external site.) guide.
In 2015, Microsoft Corporation reported a $5.1 billion charge for the impairment of goodwill and a $2.2 billion charge for the impairment of intangible assets in one of its reporting units (segments) in its 10-K annual report. Referring to Microsoft’s 2015 financial statements and any other information from the media, address the following:
- Microsoft’s segments serve as its reporting units for assessing goodwill for potential impairments. Which segment suffered a 2015 impairment? Describe the revenue model for this segment.
- What were the underlying business reasons that required Microsoft to record a goodwill impairment in 2015?
- How did Microsoft reflect the 2015 goodwill impairment in its income statement and cash flow statement?
- Describe in your own words the goodwill impairment testing steps performed by Microsoft in 2015 and the consequent loss measurement.