For Parts A, B & C, assume that Good Life Insurance Company has NOT yet adopted ASU 2017-04.
For Part D, assume that Good Life Insurance Company adopted ASU 2017-04 on January 1, 2018.
On January 1, 2018, Good Life Insurance Company acquired 100% of the outstanding common stock of Online Insurance, which sells individual automotive and renters policies via the internet. Good Life made the acquisition with the hopes that some of Online Insurance company’s internet customers would also be interested in purchasing life insurance via the internet.
At the time of the acquisition, the balance sheet of the identifiable assets and liabilities of Online Insurance were as follows:
Book Value Fair Value Book Value Fair Value
ASSETS $ 100,000,000 $ 140,000,000 LIABILITIES $ 80,000,000 $ 80,000,000
The difference between the fair value and the book value of the identifiable assets was attributable to internally generated intangible assets, such as customer lists, that were created by Online Insurance.
Good Life Insurance paid $ 95,000,000 in cash to the shareholders of Online Insurance. Good Life based this amount on an internal calculation that indicated that
acquiring Online Insurance would increase the value of their life insurance business by
$ 24,000,000, with the remaining premium being necessary to convince Online Insurance shareholders to sell. Prior to the acquisition of Online Insurance, Good Life did not sell automotive or renters policies, and thus they considered Online Insurance to be a “new” reporting unit.
During 2018, Online Insurance generated after-tax profits in the amount of $ 6,200,000, and paid $ 4,000,000 of dividends. The fair value of the identifiable “Net Assets” of Online Insurance on December 31, 2018 were $ 56,000,000.
Based on the information provided above, please address the following questions.
A. (1) What is the carrying value of the “Online Insurance” reporting unit, prior to
Ccnsidering any potential Goodwill Impairment, as reported on the consolidated
US GAAP financial statements of Good Life Insurance Company, on 12/31/18?

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