1. Step 1: qualitative impairment test compares the implied fair value of the reporting unit, $320,000, to the unit’s book value (including goodwill), $345,000. Step 2: impairment loss calculation...

1. Step 1: qualitative impairment test compares the implied fair value of the reporting unit, $320,000, to the unit’s book value (including goodwill), $345,000. Step 2: impairment loss calculation compares the implied fair value of the reporting unit, $320,000, to the unit’s estimated fair values (excluding goodwill), $285,000, on the impairment date.

2. While fair values of net assets are used to measure the impairment loss, they are not recorded. The existing book values on the impairment date remain in place (unless they are adjusted for their own impairment loss).