Jakobe Company Acquires an Average of Two Companies Per Year

question 91

Multiple Choice

Jakobe Company acquires an average of two companies per year in its efforts to integrate and expand.Which of the following statements best represents Jakobe's treatment of multiple goodwill in the assessment of impairment?

• A)All goodwill must be netted at the reporting level for testing and isolated at the individual subsidiary level.
• B)The goodwill of a single unit will be selected at random each year for testing and all operating units must be cycled in testing every five years.
• C)Goodwill within operating segments can be netted,but goodwill that exists in different operating segments cannot be offset.
• D)Goodwill is not a factor in the testing of impairment,only the undiscounted cash flows of an individual reporting unit will be considered.

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