Piri Ltd Acquired 100% of the Commons Shares of Golden Co

question 17

Multiple Choice

Piri Ltd. acquired 100% of the commons shares of Golden Co. This business combination resulted in $100,000 of goodwill. Piri allocated the goodwill to three cash-generating units. At its year-end, Piri conducts a goodwill impairment test. Which of the following statements about the impairment test is true?

• A)The impairment test is applied to Golden Co. as a whole.
• B)The impairment test is applied to the business combination as a whole.
• C)The impairment test is applied to each of the three cash-generating units to which goodwill has been allocated.
• D)Piri is not required to conduct an impairment test unless its circumstances have changed materially from its previous year.

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Definitions:

Preoccupation

A state or condition of being excessively and disturbingly concerned with something, often to the exclusion of other considerations.

Overwhelming Feelings

Intense emotions that can overpower one's ability to cope or make rational decisions.

Adjustment

The process of adapting or becoming accustomed to a new situation or environment.

Grief

Emotional response experienced in the early phases of bereavement.