In a Standard Audit Program for Goodwill Impairment Testing, If

question 126

Multiple Choice

In a standard audit program for goodwill impairment testing, if the original reporting unit no longer exists because operations have been fully integrated into operations of the parent company, which approach should the auditor take?

• A) Compare market value with carrying value. A market value less than carrying value is presumptive evidence that goodwill has been impaired.
• B) Compare fair value with realizable value. A fair value less than realizable value is presumptive evidence that goodwill has been impaired.
• C) Compare book value with realizable value. A book value less than realizable value is presumptive evidence that goodwill has been impaired.
• D) Compare book value with market value. A market value less than book value is presumptive evidence that goodwill has been impaired.

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Definitions:

Self

The individual's perception or concept of their own identity, including their characteristics, traits, and behaviors.

Psychosocial Stages

Erik Erikson's theory that individuals pass through eight stages of development, each with its own psychosocial challenge, from infancy to adulthood.

Erikson

Refers to Erik Erikson, a developmental psychologist known for his theory on the psychological stages of human development spanning the entire lifespan.

Young Adulthood

A developmental stage ranging approximately from late teens through the twenties, characterized by exploration of personal and professional identity.