Buster Ltd Had Purchased Goodwill to the Value of $100,000

question 25

Multiple Choice

Buster Ltd had purchased goodwill to the value of $100,000 recorded in its consolidated financial statements.The goodwill has been determined to have an indefinite useful life.However,one year later Buster Ltd's cash generating units has been determined to have incurred an impairment loss of $13,000.What is the appropriate action for Buster limited to comply with AASB 138 "Intangible Assets" and AASB 136 "Impairment of Assets"?

• A) Write-off goodwill in its entirety as goodwill no longer exists.
• B) Recognise impairment loss of $13,000 and credit goodwill.
• C) Amortise goodwill for 20 years using straight-line method.
• D) Recognise impairment loss of $13,000 and credit equity.
• E) None of the given answers.

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Definitions:

Concrete Identifications

The process in early child development where children categorize objects and persons in their environment in a literal and straightforward manner.

Naming Conventions

Established rules for determining the names of things within a particular field or industry.

Abstract Information

Concepts or ideas that are not concrete or tangible but are understood intellectually or represent something symbolically.

Object Permanence

The understanding that objects continue to exist even when they cannot be seen, heard, or touched.