Accounting Nike Essay

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1. How much goodwill impairment charge did Nike report in 2009? In 2009 Nike reported a goodwill impairment charge of $199 2.Why did Nike write down its goodwill in 2009? What are some other indicators for goodwill impairment in general? The impairment was because the assessment of Umbros goodwill resulted in impairment charges. Other goodwill impairment indicators are significant changes in the climate of business, results of operations, a fall in investment value, or expecting the carrying amount to not be recoverable. 3. How did Nike reflect this impairment in financial statements? The impairment was reflected in financial statements under the head Identifiable intangible asset, goodwill, and umbra impairment as impairment charge. The balance was stated under the head others. The goodwill impairment is written under the head goodwill impairment 4. How often does Nike test its goodwill for impairment and what are the testing steps? They test their goodwill for impairments annually. The steps to test for it are to estimate the fait market value, compare the fair value with carrying amount (if carry value is more than the fair value, goodwill is impaired), and the company records the impairment loss equalling excess of carrying value over fair market value of goodwill. 5. Certain other indefinite-lived intangibles and other long-lived assets (including intangible assets with a finite life) are also subject to impairment assessment. Did Nike incur any of these impairment charges in 2009? Nike did incur a total impairment charge of $401 and goodwill impairment of $199. From these, the balance was pertaining to asset impairment. Explain briefly when and how Nike tests these assets for impairment. They review the carrying value of assets whenever indicated by circumstances. After following discounted value of cash flows, if that value is less than

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