A Subsidiary Which Is Identified as a Single Cash Generating

question 33

Multiple Choice

A subsidiary which is identified as a single cash generating unit (CGU) has property plant and equipment assets with a carrying amount of $100,000 and a recoverable amount of $80,000.On acquisition of the subsidiary goodwill of $60,000 was recognised.The amount to be identified as goodwill impairment loss is:

• A) $100,000
• B) $80,000
• C) $20,000
• D) $60,000

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Definitions:

Right of First Refusal

A contractual right that gives its holder the option to enter a business transaction with the owner of something, before the owner is entitled to enter into that transaction with a third party.

Common Stockholder

An individual or entity that owns shares in a company's common stock, giving them the right to vote at shareholders' meetings and to receive dividends.

Proxy

An authorization to represent someone else, especially in the context of voting shares of a company.

Shareholder Authority

The rights and powers that shareholders have within a company, including voting on key issues and decisions.