In Reference to the Determination of Goodwill Impairment,which of the Following

question 49

Multiple Choice

In reference to the determination of goodwill impairment,which of the following statements is correct?

• A)The goodwill impairment test under ASC 350-20-35 is a three-step process.
• B)If the reporting unit's fair value exceeds its carrying value,goodwill is unimpaired.
• C)Under FASB 142,firms must first compare carrying values (book values)at the headquarter level.
• D)Firms can reverse previously recognized impairment losses.

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Definitions:

Percent Change

A mathematical calculation that expresses the degree of change over time as a percentage.

Prepaid Insurance

An asset account that represents the cost of insurance paid in advance, which is expensed over the period the insurance coverage pertains to.

Account Group

A classification system used in accounting to organize similar accounts together, facilitating the management and reporting of financial information.

Interest Revenue

Income that a company earns from its investments in interest-bearing accounts or securities like bonds, loans, or savings.