Hello, welcome back to metals in biology. We have seen how efficiently metals in biology can control the reactivity pattern of the reactive intermediates. By utilizing these reactive intermediates, we have seen tremendous amount of interesting synthetic transformation can be carried out by these organometallic or the bioinorganic complexes which are having the metal center at the core. Today, we will see the copper oxygen chemistry more precisely mononuclear copper oxygen chemistry. How when you have one copper center and one oxygen molecule is reacting with it, the species formed and then the reactivity pattern of such basis. As you have seen earlier that reacting copper or any other metals such as iron, manganese reacting them with oxygen often leads to the dinuclear, trinuclear or even tetranuclear species. Stabilizing a mononuclear intermediate by reacting with small molecule oxygen is really challenging because usually the first form intermediate will always react with another equivalent of metal center. So, essentially no matter what happens when you have a ligand copper 1 complex or ligand iron 2 complex, these complexes will react with oxygen and these reactions are extremely fast. Right after reacting with oxygen the first form intermediate will be so much reactive that it will react with another equivalent of the reduced metal. Therefore, usually we end up getting a binuclear complex, but stabilizing a mononuclear complex is always challenging. We will try to discuss that today let us let us say. So, the outline of today's lecture is going to be on mononuclear copper superoxo complex chemistry where one ligand copper complex is reacting with one oxygen to give ligand copper superoxo species and how these superoxo species will react with organic substrate. The second topic would be the reaction of a ligand copper 2 complex with hydrogen peroxide in presence of base to give the ligand copper hydro peroxo species and what the reactivity pattern of such hydro peroxo species be. Well, why we are interested in such mononuclear copper oxygen intermediate? This is precisely because of the fact that there are number of enzyme where such mononuclear copper oxygen species have been implicated as the key intermediate for doing the or carrying out the enzyme activity. So, in nature in biological system we have both proposition for a copper superoxo as well as copper hydro peroxo intermediate for doing substrate hydroxylation chemistry. Let us try to look at the you know enzymatic relevance of such species. So, the biological inspiration for studying such mononuclear copper oxygen species comes from the fact that very important enzymes such as dopamine beta monoxygenase and peptidyl glycine alpha hydroxylating monoxygenase PHM both DBM and PHM are having a mononuclear copper oxygen intermediate which can react with its corresponding substrate to give the substrate hydroxylation product. For the case of DBM it is the dopamine as the substrate that is reacting with the copper oxygen species to give the substrate hydroxylation product in the overall process the dopamine is converted into norepine frame. In case of PHM it is the C-terminus backbone of the protein residue which is getting hydroxylated selectively by using the active copper oxygen species. Now, these both the PHM and DBM are homologous copper protein. So, what is true for one enzyme is going to be true for the other one and they are decided in the neurosecretary vesicle. By catalyzing this hydroxylation process they actually help in production of neuro hormone and neurotransmitter. So, if these processes are not happening or if these hydroxylation chemistry are not happening there is going to be physiological consequences for these non-activated. So, we wanted of course, you know it is a very very important procedure for converting substrate into substrate hydroxylated product by using copper oxygen chemistry. And therefore, it is natural to try to understand this method in greater detail to gain into the to gain the insights into these processes a lot of studies has been done so far. This is a crystal structure of the peptidyl alpha hydroxylating monoxygenase or as I was saying that there is a mononuclear copper oxygen intermediate you might be surprised to learn that it is not a mononuclear active site it is having two copper centers, but quite interestingly these two copper centers are separated from each other by 11 angstrom. Indeed this copper 8th side which is a T-shaped copper center does not participate into the oxygen activation it is acting just as the electron transfer center. So, it can provide one electron during the copper oxygen chemistry. The main chemistry that is actually happening at the copper M center where it is ligated with two histidine and one methionine unit of course, a water molecule is there which is a labile center. Now, this copper B or also known as copper M this is the same center copper B and or copper M this center will react with oxygen to give a reactive copper oxygen intermediate. Now, from this copper center this copper H is once again separated by 11 angstrom they are not coupled with each other during copper oxygen reactivity. So, this is just going to be a spectator almost a spectator for the copper oxygen chemistry. As I mentioned this is going to participate indirectly by providing one electron during the complete catalytic cycle of this PHM activity. So, similar structure is true for DVM once again there is two copper center copper M and copper H also known as copper B and copper A. This is the site which is going to be the active site or the copper oxygen reaction center. Quite interestingly you see that there is a methionine binding one can assume that this sulfur is going to be very reactive towards the reactive copper oxygen species and therefore, may also get oxidized to something like sulfoxide or sulfone, but nature has designed in such a way so that still the selective hydroxylation of the substrate can be carried out by this copper center. A number of atoms has been made to get the crystal structure of such species this is the reduced form of the species which is also interesting, but most interesting is the one where oxygen is reacted with the copper center. After long deliberation and decades of effort researchers were able to crystallize this intermediate where clearly this copper M center is bound with oxygen. Now, this oxygen is turning out to be a super oxide species that means, this copper center is now a copper 2 and oxygen unit is reduced by one electron to give the super oxo species. Just to remind you in the reduced form both the copper centers are in plus 1 oxidation state. While it reacted with oxygen then the oxygen gets reduced to super oxo and copper gets oxidized to copper 2 plus therefore, this is a copper 2 super oxo species. As you see that only one of the oxygen atom of this copper oxygen moiety is bound with copper the other oxygen atom really is not bound with copper. So, this sort of geometry is called the end on geometry only one of the end is bound with one of the metal the other oxygen atom is not bound with this metal. So, this is an end on copper 2 super oxo species end on copper 2 super oxo species is being formed and it is clearly demonstrated by the crystallography. Now, does it mean then then this copper super oxo species is the reactive species in the PHM and DBM substrate hydro hydroxylation chemistry? Well, that could only be you know concluded after much deliberation, but the debate is still on whether it is really the copper oxygen species which we are showing over here the end on copper super oxo species is the active species for such chemistry. Now, therefore, let us try to understand the long standing debate here let us go back to the PHM and DBM here we see that substrate is getting hydroxylated both the cases substrate is getting hydroxylated right. So, it is been over decades there has been deliberation there has been you know controversies among the scientist or in the literature that what is the real active species that is doing the chemistry some believes that it is the copper super oxo species if we go back at the last slide. So, this is the copper super oxo species that is the species we are trying to discuss some other believes that this is the copper hydro peroxo species which can be formed upon hydrogen atom abstraction from the organic substrate by this copper super oxo species to form this intermediate. So, the debate is essentially focused on whether this copper super oxo species is the reactive intermediate or copper hydro peroxo intermediate is the reactive intermediate because both are likely to be formed in the PHM and DBM. Although crystal structure now is known for these enzymes with copper oxygen bound clearly showing that it is a copper super oxo species that is do that is that is forming, but still it cannot rule out clearly the possibility of formation of a copper hydro peroxo species originating from the copper super oxo species. Therefore, I will come back to this debate in a moment once more let us go on. So, this is the copper super oxo species and there has been proposal by various research group that this is the species which is responsible for the substrate hydroxylation chemistry. Let us look at the mechanism by which this copper super oxo species perhaps can react with organic substrate to give the substrate hydroxylation chemistry. Well, this is a mechanism proposed by Judith Kleinman's group and from University of California Berkeley where Kleinman's group suggested although they have previously suggested a copper hydro peroxo species in this work and subsequent work they have suggested that this is the copper super oxo species that is responsible for the substrate hydroxylation chemistry in both PHM and DBM. Now, let us look at very simplified manner. So, this is two copper center that we have seen in the last slide if just to remind you once again here is the copper M here is the copper H or copper B sorry copper M or copper B, copper H and copper A is the same side. So, copper M and copper H, copper B and copper A these are the nomenclature in the literature we need to get familiarized with. So, now you have copper M and copper H separated by 11 angstrom 2 histidine 1 methionine is ligated with copper and this is the copper H which is having a T-shaped geometry 2 histidine over here sorry 2 histidine over here another histidine over here. So, overall this is the active site ok it is a dinuclear copper centers which are in the or dicopper center not the dinuclear say dicopper center which are present. This is the reactive site as you see that oxygen will come in and will reside very close to this copper M center and will bind with or bind with this copper center the substrate is residing right next to the active site which is quite interesting as you see the substrate binding site is right over here extremely close to this copper M site. This substrate binding and this copper center is not very close to each other this also once again indicates that this is the real active site where the chemistry is going to happen in any case. So, upon binding with or a binding with copper oxygen copper with oxygen so, we subsequently will get a copper superoxo intermediate. So, this is a still not a great reaction the you know the intermediate is really in equilibrium where equilibrium is mostly towards the copper oxygen intermediate copper oxygen bound intermediate. So, here what is happening from copper M to oxygen this is a copper 2 superoxo species is forming one of the electron for copper M is getting transferred on the oxygen to form the copper 2 superoxo species still the substrate is sitting very close to this active site 2 histidine 1 methionine and you have a copper superoxo species right over here. Now, from there on what happens this superoxo species can abstract hydrogen atom from this organic substrate to give the hydroperoxo species wow. So, as you can see that copper superoxo is right over there and copper hydroperoxo is right over there. As you have drawn over here by this mechanism this is the copper superoxo species which is abstracting the hydrogen atom which is undoubtedly the key step for the substrate hydroxylation chemistry. As you can see the substrate is now forming a radical and the copper 2 superoxo species has been converted to copper hydroperoxo. There is a extended hydrogen bonding network with water where this you will see that it overall this hydroxo can be transferred back to the copper H as in the form of copper to hydroxide ok. Now, as you can see this radical and copper 2 hydroperoxo sitting very close to each other there is there is going to be an electron transfer in the next step where this copper 1 plus oxidation state of the copper H will provide 1 electron to this intermediate overall will help you break the oxygen-oxygen bond of this copper 2 hydroperoxo species. The hydroxyl radical that generates over there gets converted to hydroxide by accepting this 1 electron from the second copper center this hydroxide gets laid to the copper 2 center now at the copper H. So, copper it was copper 1 plus center gives up 1 electron. So, it becomes copper 2 plus that 1 electron is picked up by the hydroxyl radical from the copper 2 hydroperoxo species this hydroxyl radical is now converted to hydroxide and they bind with each other to form the copper 2 hydro hydroxyl intermediate. Now, as you see what it has happened in the process also that we are now able to generate yet another interesting intermediate which remain elusive so far in the literature in terms of full characterization and that is the cupril intermediate so, called copper 2 O dot or copper 3 oxo species now that is quite exciting ok. Now, this copper 3 oxo is copper 2 O dot or copper 3 oxo is then going to react with this substrate radical to give the copper 2 alkoxy intermediate ok, overall then we are going to get copper 2 alkoxy intermediate which is now you can see upon protonation it can give the substrate hydroxylation product and rest of the catalytic cycle can be completed upon reduction from ascorbate to give the copper 1 and copper 1 cycle. So, what you have seen over here essentially the 2 copper centers separated by 11 angstrom from each other and only one of them is reactive the other one is almost a spectator of course, not truly a spectator, but almost a spectator where it participates in electron transfer process during the oxygen-oxygen bond cleavage of the copper hydroperoxo intermediate. Now, in principle over this mechanism we can see that the copper M center which is also known as copper B center will react with oxygen to give first the copper oxygen bound to adduct subsequently it gives you the copper superoxo intermediate and then it abstract hydrogen atom to give the copper 2 hydroperoxo intermediate which then undergo a homolytic copper oxygen oxygen bond cleavage to give the hydroxy radical and then that hydroxy radical upon accepting 1 electron from the copper get transferred to the copper 2 center copper 8 center to give the copper hydroxy intermediate and this oxo radical actually gets transferred to the substrate radical intermediate which was generated by hydrogen atom abstraction of the substrate. Now, this recombination or rebound overall happens to give the copper 2 alkoxide intermediate which upon protonation can give the product. This is quite fascinating and quite interesting intermediate, but the only problem here is one can draw a mechanism almost by changing a very little thing which I will come in subsequent slides where you will see that even a copper hydroperoxo can be formed without abstracting hydrogen atom by copper superoxo that means, 1 electron transfer from the copper 8 center and a protonation can also give this hydroperoxo intermediate and it has also been proposed by quite a few group that this copper hydroperoxo is that real intermediate that is doing the chemistry. Let us not get into too much of that we will come back to that in subsequent slide let us move on ok. So, I hope what I am trying to tell you over here is although crystal structure of a copper superoxo intermediate is reported or known now still the debate is on in case of this very important PHM and DBM enzyme what is exactly the real intermediate that is responsible for the substrate hydroxylation chemistry. For instance as I have discussed very briefly that copper superoxo species can be the active species we have seen the mechanism proposed by few groups. Now, it is the same group which were previously proposing that copper superoxo is the real active intermediate they were like clean men group were previously proposing also that the copper hydroperoxo is the real intermediate for this chemistry we will come back to that again. While yet a series of studies also suggested that it is neither of the copper superoxo or copper hydroperoxo that is doing the chemistry, but it is the copper superoxo and hydroperoxo generated intermediate which can be a Q3 is really the true intermediate and therefore responsible for substrate hydroxylation chemistry. Well one of the thing is really this intermediate so far even in synthetic setup is not crystallographically characterized or the characterization of such intermediate so far is not that great and since no synthetic chemistry is known so far to give reliably these species and the reactivity pattern of this. So, our studies or our discussion will mainly focus on these two once again this is not too much known even in synthetically I mean of course, not too much known in terms of enzyme also, but that does not rule out this as a reactive intermediate this still pretty much stay as the reactive intermediate and we will mainly try to focus on the first two intermediate and that is copper superoxo and copper hydroperoxo. Well we would like to see briefly how we can synthesize these complexes and what is their reactivity pattern of course, what are their properties and so on briefly we will try to mention. So, today for the remaining part of the lecture we will try to see these copper superoxo species formation and how it is reacting ok. Copper superoxo, copper hydroperoxo Q3 or Cu2 or not ok. Well before getting into this I think we must understand that this chemistry is going to be quite sensitive as you have seen briefly earlier that whenever a ligand copper complex is reacted with oxygen there is this thermodynamically preferred down nuclear intermediate formation. So, it is very difficult to stabilize a mononuclear although this is the kinetically fast formed intermediate, but still a mononuclear intermediate such as these are usually very difficult to stabilize in the mononuclear form because they tend to dimerize. So, this is the species you have seen that crystallographically characterized in enzyme, but getting such intermediate in synthetic setup where many copper centers are available is very difficult because once such intermediate is forming another copper one center can react with this to give any of dinuclear intermediate over there. Well it is a great challenge to stabilize such mononuclear copper oxygen intermediate ok. Now, one thing that can of course, influence this intermediate is the ligand for this copper center right. Now this ligand for this copper center and in combination with the strategy solvent temperature all of these will have effect in stabilizing such a mononuclear intermediate where these thermodynamically preferred dinuclear intermediate formation can be prevented ok. So, those chemistry I will be discussing in the next class let me sum up by saying that today we have discussed although not in great detail so far we will come again and that is this debate ongoing debate in the literature that whether copper superoxo, copper hydro peroxo or cupreel is the reactive intermediate you have seen these are the three species that are in debate. We have discussed the reaction mechanism involving copper superoxo as the real active species for both PHM and DBM enzyme. It perhaps can be thought of that this copper superoxo is the real intermediate, but the debate is still on a lot of groups are proposing that either this cupreel or copper hydro peroxo can also be the reactive species which is responsible for the substrate hydroxylation chemistry that we have seen in PHM and DBM. We will discuss on how to synthesize these mononuclear species and their reactivity pattern in the next class. The challenge essentially is the stabilizing such mononuclear intermediate. How one can think of stabilizing such super reactive mononuclear intermediate where really thermodynamically preferred product is the dinuclear one. We will come back to that keep studying some of the literature references are cited you know feel free to read from any of the book or any of the literature that we have cited. See you soon in the next class discussing about the reactivity pattern of the copper superoxo and hydro peroxo species. Most importantly how to prevent the dinuclear species formation and form the these mononuclear species. With that thank you very much see you soon.


If we look under the jaw, under the tongue here, we have two glands, two salivary glands. One here, the sublingual gland and then the submandibular gland, right next to it. Now, continuing on with digestion here, we can look at our jaw and we have different types of teeth.  My canine has actually gone MIA but it's a pointy tooth and I'll show you in class. Then you have incisors, central, of course, are in the middle and lateral are more off to the side. Now, if we take any of these teeth and we look at them individualistic, we can see they're made up of multiple components. So you have enamel, which is the white part of the tooth on the outside here. Underneath the enamel itself is the dentin, then the pulp inside of that. This top part from about here up is the crown of the tooth, the root of the tooth is the part that actually sticks down into the mandible, into the velar margin. If we look right at the edge of the root there, you can see where it's a little lighter along the edges. This is called cementin. On this particular tooth, we can see it's got a cavity. So this part here, the correct name for a cavity would be a dental carry.


Hello and welcome to the session in which we would look at goodwill impairment. This topic is covered in intermediate accounting and advanced accounting as well as the CPA exam. So it's very important whether you are an accounting student or a CPA candidate to understand how goodwill and goodwill impairment works. Now at this point I'm assuming you are you know what goodwill is although I'm going to go over brief overview how to compute goodwill initially. Now if you are an accounting student or a CPA candidate I strongly suggest you take a look at my website forhatlectures.com. I don't replace your CPA review course. I am a useful edition alternative explanation backup explanation that's going to help you understand the material better and by doing so you'll be able to understand your CPA review better and my courses are aligned with your CPA review course which in turn you'll be able to pass your exam. Now your risk with me is one month of subscription you can try it if you like it you keep the subscription if not you cancel your potential gain is passing the exam and if not for anything take a look at my website to find out how well or not well your university doing on the CPA exam and the list of other courses that I teach. If you have not connected with me on LinkedIn please do so and take a look at my link take a look at my LinkedIn recommendation like this recording share it with other connect with me on Instagram Facebook Twitter and Reddit. So let's talk about goodwill. How is goodwill created for example when you want one company purchase another company goodwill is created how so let's assume you're buying a company and they have a fair value of their assets is 100 000 that's the fair value of their assets the fair value of their liabilities is six stages for the sake of illustration so the fair value of their book value is 40 000 now let's assume you paid you paid 75 000 for this company you paid 75 000 for something that's worth 40 000 so you paid an access of 25 000 and to make the simple we're going to assume you could not find any identifiable asset to allocate this 25 000 whether it's tangible or intangible so if you cannot allocate this 25 000 to any asset or liability sometime what you need to do the remaining will be goodwill so goodwill is created when one company purchase another company in access of their fair market value and that access first will have to be allocated to identifiable tangible or intangible asset if not any remaining goes to goodwill now this 25 000 sits on the books but what do we have to do with it well the first thing we do is we're gonna we're gonna consider it that it has indefinite life and this is important when we're dealing with goodwill and intangibles it's very important to know that if something has an indefinite life indefinite life means we don't do any amortization if we don't do any no amortization what we do is we do impairment so we have to check for to see if the value of that asset went down so there's no rationale about there's no need for this rationale and systematic manner reduction like in depreciation on amortization so we don't amortize we don't depreciate what we do is we're going to impair and goodwill impairment the loss itself is basically an operating item it goes on the income statement as one line of losses then we perform this goodwill based on what's called the reporting unit and we're going to talk about the reporting unit a little bit more detail within a combined entity so we would look at the reporting unit and we will test for impairment on the reporting unit so each reporting unit is will be separately subject to that periodic impairment review and what's that periodic usually annually sometime we do it more than annually if circumstances arise but usually at least annually we have to do this impairment we have to check to see is our reporting unit impaired now how do we how do we say we have a reporting unit that's important what what is reporting unit or units okay what is what is that reporting unit first of all it has to be it has its own operating line it's distinct operating line so it's basically a separate business and that separate business has to be responsible for its assets liabilities and earn its own profit the unit itself it's part of the company but it's accounted for separately and it reports earning to top management for support and decision-making so simply put it's like an independent unit within the overall entity we call this a report reporting unit and what we do is we test the reporting unit the goodwill for that reporting unit okay so following the business combination we have identifiable assets and liabilities that are assigned to that reporting unit so we have those so any amount assigned to goodwill expected to benefit from the synergies of the combination so we have a goodwill for that reporting unit specifically okay so any individual reporting unit where goodwill resides is the appropriate level for goodwill impairment testing so when we buy a company and we have a reporting unit ABC well we're gonna have goodwill for A goodwill for B and goodwill for C each one will have their own assets their own liabilities and their own unit and to show you a real example let's take a look at AT&T AT&T identify its principal operating unit or one level below them as a reporting unit and let's take a look at their script of their annual report goodwill is tested by comparing the book value and we're going to talk about this later of each reporting unit deemed to be our principal operating segment to one level below them and these are the operating unit business solutions entertainment group consumer mobility mexico wireless brazil and pan america and the international market at the fair value so we compare the book value to the fair value and they use discounted cash flow as well as market multiple approach this is the way that they do the impairment we'll discuss this shortly okay so notice all goodwill impairment testing is performed at the reporting units what they do is they look at the mexican unit separately mexican wireless and they would compare the book value to the fair value and what do they use when they do so well the book value is the balance sheet the fair value they use either discounted cash flow or they might take a look at market multiple basically how much would the market value that reporting unit today in the actual market based on some multiple okay and this what what happens when you when you look at each reporting unit separately okay what's that gonna do it's not gonna mask so for example if entertainment groups goodwill went down and consumer mobility went up if you combine them they will cancel each other you don't want to do that so you want to report each one separately so not one of them will mask the other mask the decrease in the other okay so one goes up the other goes down they cancel each other out you don't want to do that if one goes down you will account for that separately now what do you do how do you how do you how do you how do you find out how do you start this whole process well impairment testing can be very costly therefore it's well although it's yearly but you know to do the impairment testing itself using numbers it's costly so what fast be what fast be recommended is you can do what's called qualitative analysis to assess whether testing procedures are appropriate so you don't start the testing immediately because it's costly because you have to do cash flow analysis you have to collect data so you do what's called qualitative analysis now what are the qualitative analysis there are many factors that will tell you whether to do to perform impairment testing well what are those factors i'm going to show you a list this is not the complete list you can think of other list one is macroeconomic conditions like what general economic conditions like the economy is contracting there's a foreign currency fluctuation where you are exposed to that foreign currency there is a decrease in credit market something happened in the macroeconomic condition that affect your company maybe maybe you want to take a look at that reporting unit maybe at lost some value industry and market consideration this could be deterioration deterioration in the environment in which you operate for example during the real estate crisis if you are if you if your company deals with real state if it's exposed to the real estate there's a deterioration in your markets you want to take a look at your goodwill to see if it's impaired or there's an increase in competitive environment you have new companies that are coming onto the market that are better and they provide better service at a lower cost than you a decline in the market-dependent multiple of matrixes both is an absolute and relative value and this could take many those matrixes matrices could take any value like the stock market maybe your stock price went down and either an absolute or relative relative to the peers and change in the market or an entity product or services there's a major change in your product that's no longer useful or a regulatory or political development or guess what let's assume it's it's it's a medication the FDA says take it out it's dangerous you know then what's going to happen that reporting unit might the goodwill of that reporting unit might be impaired so those are qualitative tests just basically looking for events that trigger that you know and do I have do I have a goodwill impairment those are the events that you look for cost factor if the cost if the cost that goes into your product went up like raw material labor there's a shortage could have a negative effect on earning well your company might be your reporting unit might be impaired other financial performance like negative or declining cash flow and this is on the CPA exam they always tell you negative negative or declining cash flow it's really a red flag for goodwill and testing for goodwill impairment or a decline in the actual or planned revenue earning so if you have a unit and it's not going to be generating revenue in the future guess what it might be impaired then what if they have a goodwill guess what if that's had the goodwill test the goodwill for impairment and we're going to see how do we do that in moment changes in management sometime let's assume Elon Musk leaves Tesla who knows maybe Tesla tanks is like you know what maybe it's if they have any goodwill they have to maybe test that goodwill key personnel strategy or customers any event could trigger goodwill now this event that has to be more likely than not now how do you define more likely than not it's 50 plus so if the reporting fair value unit is deemed to be greater than than the carrying amount of there's more than 50 chance that the fair value is greater than you don't do anything you just say okay no further impairment tests are necessary but if the reporting unit fair value so we'd look we would compare fair value versus book value if the fair value is less than we think we think it's less than the book value 50 plus a chance then what we do we have to do further testing now again we do this annually but remember we don't have to wait annually for example when covid hit in march of 2020 or you know march or february it doesn't matter what happened is then if you purchase some businesses recently you have to test them for if there's any goodwill impairment because businesses are going down okay so you don't have to wait yearly more frequent impairment assessment is required if events or circumstances change that make it more likely than not that the reporting unit fair value is now below the carrying value so it doesn't have to be annually but at least annually but if something happened before it's annually then you will do it let's take a look at an example assume on january 1st 2022 investors from new call corporation can to consolidate the telecommunication operation of dsm and vision talks in a deal that's worth 2.2 billion so those two companies consolidate dsm and vision talk new call organizes each former firm as an operating unit and recognizes 215 million as goodwill at the merger date then allocate this amount to three different unit so what they did they said well our total goodwill is 215 and they have three reporting unit the dsm wire dsm wireless and vision talks and what they do they allocated this 215 million to those three units 22 million for dsm 150 dsl wired a wireless 155 and vision talk 38 million now at the end of the year what they have to do they have to examine any relevant event what i showed you earlier in the prior slide in circumstances to determine the fair value of the reporting unit tell what did the analysis revealed well it revealed that the fair value of each reporting unit likely exceeds its carrying amount except for this dsm wireless this dsm wireless it seems that they have a difficulty realizing expected cost savings synergies with vision talk so what they did they assume dsm wireless when they first merge that because of that merger they're going to save the cost at the end of the year they find out this saving cost did not really materialize it means our cost went up guess what more likely than not that this reporting unit is subject to goodwill impairment now we're going to have to look at this unit separately the other two they're good dsm wired is good vision talk is good why because the fair value at the end of the year is greater than the book value this one fair value greater than the book value i don't have to do anything now we must proceed with the impairment testing so let's do the impairment testing okay now we compute the impairment testing and we find out the fair value is 650 the carrying amount is 720 the book value carrying amount what happened is the difference between them is 70 million 70 million the difference between them is 70 million okay what does that mean well we have 155 of goodwill impairment and now we're gonna goodwill we're gonna have to reduce it by 70 million so we're gonna take the 70 million and report 70 million of impairment loss is on a separate line in the operating section it's basically businesses by other businesses and as a result they have goodwill as a result that goodwill could be impaired it's a regular loss it's an impairment loss it's not unusual or anything okay as of December 31st 2022 new call reports only 85 million of goodwill remember there were 155 they have to subtract 70 because we're gonna debit a loss impairment loss credit goodwill for 85 for 70 million that's the entry impairment loss impairment loss credit goodwill therefore we reduce the goodwill by 70 million the other two units they're good we don't have to do anything now we also have to do additional disclosure such as facts and circumstances to why we did this impairment the method that we use to determine the fair value remember the fair value was 650 how did we come up with fair value did we use discounted cash flow did we use market multiple okay what did we do did we compare dsm wireless to some other business that's compared to us okay now bear in mind impairment loss cannot exceed the carrying amount of any particular reporting units goodwill so simply put let's assume we find out that good word impairment loss is 160 million well guess what we can only take 155 it cannot exceed that this is basically a summary of goodwill impairment once again at the end of this recording i'm gonna remind you that your study for your cpa exam once in your lifetime you pass it you move on with your life don't shortchange yourself i don't replace your cpa review course i'm a useful addition give me a try study hard for the cpa exam it's worth it it's you pay you pay for it once it's gonna pay different for the next 30 to 40 years good luck study hard and of course stay safe