Which of the Following Assets Need to Be Tested for Impairment

question 6

Multiple Choice

Which of the following assets need to be tested for impairment every year?
I intangible assets with indefinite useful lives
II intangible assets not yet available for use
III intangible assets accounted for under the revaluation method
IV goodwill acquired in a business combination

• A)I,II and III only
• B)II,III and IV only
• C)I,II and IV only
• D)I,III and IV only

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Definitions:

Variable Costs

Costs that change in proportion to the level of production or business activity.

Committed Fixed Costs

Expenses that a company has committed to pay over a period, which do not vary with the level of production or sales.

Depreciation

An accounting method of allocating the cost of a tangible or physical asset over its useful life or life expectancy.

Variable Cost

Expenses that change in proportion to the amount of goods produced or the volume of sales.