Which of the Following Statement(s)in Regard to Goodwill Is/are Correct

question 24

Multiple Choice

Which of the following statement(s) in regard to goodwill is/are correct in accordance with AASB 136 "Impairment of Assets"?

• A) An impairment loss must be recognised when the carrying amount of a cash-generating unit exceeds it recoverable amount.
• B) An impairment loss recognised may be reversed in subsequent period.
• C) Value in use is the present value of future cash flows expected to be derived from a cash-generating unit.
• D) All of the given answers.
• E) An impairment loss must be recognised when the carrying amount of a cash-generating unit exceeds it recoverable amount and an impairment loss recognised may be reversed in subsequent period.

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Definitions:

Conforming Goods

Products or materials that meet the specifications and standards outlined in a contract or agreement between buyer and seller.

Course of Performance

A term referring to the conduct between parties that is used to interpret their agreement within their ongoing business relationship.

Usage of Trade

Established practices or methods of dealing regularly observed in a particular industry or trade.

Commercially Impracticable

A condition in contractual agreements indicating that fulfilling the contract has become excessively burdensome or impossible due to unforeseen events.