Simco's Shaving Products Division Was Acquired Over Ten Years Ago

question 29

Multiple Choice

Simco's shaving products division was acquired over ten years ago in a purchase transaction by BlizzardCraft.The related goodwill was amortized until 2002 and $4.5 million remained on the books thereafter.In 2008,Simco's production machinery was assessed for impairment as a long-lived asset because of obsolescence issues.What relationship will the auditors most likely make between the facts stated above?

• A)BlizzardCraft erroneously treated the acquisition of Simco as a purchase transaction when it should have been a pooling of interests.
• B)Simco should not have amortized goodwill previous to 2002.
• C)The goodwill related to Simco may have been impaired during 2008.
• D)Simco's goodwill should have been written off when purchased by BlizzardCraft in a one-time transaction.

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Definitions:

Proxemics

Research into human spatial usage and the repercussions that the density of populations bears on behavior, communication, and the dynamics of social interaction.

Japanese Culture

A unique set of traditional and contemporary cultural practices, beliefs, and values prevalent in Japan.

Cultural Dimensions

Frameworks for understanding the differences in culture across societies, often used in the field of cross-cultural communication.

Hofstede

A cultural dimensions theory proposed by Geert Hofstede, which analyzes cultural differences through five primary dimensions: power distance, individualism versus collectivism, masculinity versus femininity, uncertainty avoidance, and long-term orientation.