While Performing a Goodwill Impairment Test, the Company Had the Following

question 39

Multiple Choice

While performing a goodwill impairment test, the company had the following information:
$\begin{array}{llr} \text {Estimated implied fair value of reporting unit } &\$420,000\\ \text {Fair value of net assets on date of measurement (without goodwill) } &\$ 400,000 \\ \text { Existing net book value of reporting unit (without goodwill) } & \$ 380,000\\ \text { Book value of goodwill} & \$ 60,000\\\end{array}$

Based upon this information the proper conclusion is:

• A)The company should recognize a goodwill impairment loss of $20,000.
• B)Goodwill is not impaired.
• C)The company should recognize a goodwill impairment loss of $40,000.
• D)The company should recognize a goodwill impairment loss of $60,000.

---

Definitions:

Confidence Level

A statistical measure that quantifies the uncertainty or certainty in a sampling method, often expressed as a percentage.

Mean Cholesterol Level

The average amount of cholesterol present in the blood, calculated by summing all cholesterol levels and dividing by the number of observations.

Random Sample

A smaller group selected from a broader group, ensuring each person has the same probability of selection.

Confidence Interval

With a certain probability, a specified interval in statistics presumed to include the actual value of a parameter from a population whose characteristics are not known.