As Part of Adopting IFRS,goodwill Acquired in a Business Combination

question 44

Multiple Choice

As part of adopting IFRS,goodwill acquired in a business combination is no longer amortised.Instead,the acquirer shall test goodwill for impairment (AASB 3 "Business Combinations") .When is goodwill considered to be impaired?

• A) If the recoverable amount of the cash generating unit is greater than the unit's carrying amount.
• B) If the recoverable amount of the cash generating unit is less than the unit's carrying amount.
• C) If the value in use of the cash generating unit is greater than the unit's carrying amount.
• D) If the fair value less costs to sell is greater than the unit's carrying amount.
• E) None of the given answers.

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Definitions:

Gradual Decline

A steady and slow decrease in condition, quality, or capacity over time, often observed in physical and cognitive functions with aging.

Kubler-Ross

A model proposed by Elisabeth Kübler-Ross outlining five stages of grief: denial, anger, bargaining, depression, and acceptance.

Insurance Money

Funds received from an insurance policy, which are typically paid out upon certain events such as accidents, health issues, or death.

Denial

A psychological defense mechanism in which confrontation with a personal problem or with reality is avoided by denying the existence of the problem or reality.