On May 31, 2015, Walker Company (a US company) paid US$4,000,000 to acquire all of the common stock of Hayden Corporation (an Australian company), which now became a division of Walker. Hayden reported the following US$ balance sheet at the time of the acquisition:
Book Value $ Fair Value $
Current Assets 900,000 1,500,000
Noncurrent Assets 2,700,000 2,300,000
Current liabilities (600,000) (700,000)
Long-term liabilities (500,000) (400,000)
At December 31, 2015, Hayden reports the following US$ balance sheet information:
Book Value $ Fair Value $
Current Assets 800,000 400,000
Noncurrent Assets (Excluding Goodwill) 1,500 000 1,100,000
Current liabilities (700,000) (700,000)
Long-term liabilities (500,000) (400,000)
During the annual impairment test conducted on December 31, 2015, it was determined that the fair value of the Hayden division as a whole would be equal to the present value (using a discount rate of 10%) of the following estimated future cash follows:
December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020
$265,000 $265,000 $265,000 $265,000 $265,000
On the assumption that the fair value of Hayden on December 31, 2015 was $1,700,000 (instead of using present values), determine the goodwill impairment loss, if any, to be recorded.
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