After an Impairment Loss Is Recorded for Goodwill, What Is

question 124

Multiple Choice

After an impairment loss is recorded for goodwill, what is the basis for the impaired asset?

• A) the recoverable amount
• B) the fair value
• C) undiscounted expected cash flows
• D) discounted expected cash flows

---

Definitions:

Machine-Hours

A measure of the total run time that a machine is utilized for production over a specific period, often used as a basis for allocating overhead costs.

Direct Labor-Hours

A measure of the total hours worked by employees who are directly involved in the manufacturing process or production of goods.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders, calculated before the period begins by dividing estimated overhead costs by an estimated allocation base.

Machine-Hours

A measurement of the amount of time machines are operated in the production process, used as an allocation base for applying manufacturing overhead.