According to the FASB ASC Regarding the Testing Procedures for Goodwill

question 88

Multiple Choice

According to the FASB ASC regarding the testing procedures for Goodwill Impairment, the proper procedure for conducting impairment testing is:

• A) Goodwill recognized in consolidation may be amortized uniformly and only tested if the amortization method originally chosen is changed.
• B) Goodwill recognized in consolidation must only be impairment tested prior to disposal of the consolidated unit to eliminate the impairment of goodwill from the gain or loss on the sale of that specific entity.
• C) Goodwill recognized in consolidation may be impairment tested in a two-step approach, first by quantitative assessment of the possible impairment of the fair value of the unit relative to the book value, and then a qualitative assessment as to why the impairment, if any, occurred for disclosure.
• D) Goodwill recognized in consolidation may be impairment tested in a two-step approach, first by qualitative assessment of the possibility of impairment of the unit fair value relative to the book value, and then quantitative assessments as to how much impairment, if any, occurred for disclosure.
• E) Goodwill recognized in consolidation may be impairment tested in a two-step approach, first by qualitative assessment of the possibility of impairment of the unit fair value relative to the book value, and then quantitative assessments as to how much impairment, if any, occurred for asset write-down.

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Definitions:

Second Trimester

The period of pregnancy from the 13th to the 26th week, often marked by a decrease in pregnancy symptoms and the growth of the fetus becoming more evident.

Fetus

A fetus is a developing stage of a mammal after the embryonic phase and before birth, in humans typically from the ninth week of pregnancy until birth.

Uterus

The hollow organ within females in which the embryo and fetus develop.

Zygote

The initial cell formed when a new organism is produced by the union of sperm and an egg, marking the start of human embryonic development.