With Respect to the Treatment of Goodwill in the Analysis

question 5

Multiple Choice

With respect to the treatment of goodwill in the analysis of a company and determining the return on invested capital (ROIC) ,which of the following is most accurate?

• A)Treat goodwill impairments as operating and subtract cumulative impairments from goodwill on the balance sheet.
• B)Treat goodwill impairments as operating and add back cumulative impairments to goodwill on the balance sheet.
• C)Treat goodwill impairments as nonoperating and add back cumulative impairments to goodwill on the balance sheet.
• D)Treat goodwill impairments as nonoperating and subtract cumulative impairments from goodwill on the balance sheet.