Which of the Following Will Result in the Recognition of an Impairment

question 73

Multiple Choice

Which of the following will result in the recognition of an impairment loss on goodwill?

• A) Goodwill amortization is to be recognized annually on a systematic and rational basis.
• B) Both the fair value of a reporting unit and its associated implied goodwill fall below their respective carrying values.
• C) The fair value of the entity declines significantly.
• D) The fair value of a reporting unit falls below the original consideration transferred for the acquisition.
• E) The entity is investigated by the SEC and its reputation has been severely damaged.

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Definitions:

Blue-money Income

Informal term possibly referring to income earned in a foreign or stronger currency, or income derived from questionable or illegal activities.

Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and a product for which each unit is identical to every other unit.

Coconuts

Tropical fruits or nuts known for their water, milk, oil, and meat, and often used as examples in economic models.

Fish

Aquatic vertebrates that are typically covered with scales and equipped with fins for swimming.