For Private Enterprises That Have Acquired Goodwill in a Business

question 3

Multiple Choice

For private enterprises that have acquired goodwill in a business combination, which of the following is considered a change of circumstances for purposes of testing for goodwill impairment?

• A)A large unfavourable income tax reassessment
• B)Sale of a capital asset for a small loss
• C)A major competitor has ceased operations
• D)Retirement of the subsidiary's operations manager

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Definitions:

Tax Reform Act

Legislation aimed at adjusting tax policies, which can include changes to tax rates, tax credits, and deductions to achieve economic or social objectives.

Corporate Income Tax

A tax imposed on the net income of a company derived from its business activities within a country.

Adam Smith

An 18th-century Scottish economist and philosopher, known as the "Father of Economics," who wrote "The Wealth of Nations" and is credited with founding modern economic theory.

Economic Role

The function or position an entity or individual plays within an economic system, influencing how resources are distributed and utilized.