While Performing a Goodwill Impairment Test, the Company Had the Following

question 32

Multiple Choice

While performing a goodwill impairment test, the company had the following information: $\begin{array}{ll}\text { Estimated implied fair value of reporting unit (without goodwill) } & \$ 420,000 \\\text { Existing net book value of reporting unit (without goodwill) } & \$ 380,000\\\text { Book value of goodwill }&\$60,000\end{array}$ Based upon this information the proper conclusion is:

• A) The existing net book value plus goodwill is in excess of the implied fair value, therefore, no adjustment is required.
• B) The existing net book value plus goodwill is less than the implied fair value plus goodwill, therefore, no adjustment is required.
• C) The existing net book value plus goodwill is in excess of the implied fair value, therefore, goodwill needs to be decreased.
• D) The existing net book value is less than the estimated implied fair value; therefore, goodwill needs to be decreased.

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Definitions:

Human Resources

The department within an organization that focuses on recruitment, management, and providing direction for people who work in the organization.

Job Design

The process of organizing tasks, duties, and responsibilities into a productive unit of work to enhance job satisfaction and performance.

Performed

Executed or carried out a task or action.

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