When testing for impairment of goodwill,the recoverable amount of the cash-generating unit is calculated as ________.
A)the greater of the implied fair value of goodwill and the value in use of goodwill
B)the greater of the implied fair value of the cash-generating unit and the value in use of the cash-generating unit
C)the lesser of the implied fair value of goodwill and the value in use of goodwill
D)the lesser of the implied fair value of the cash-generating unit and the value in use of the cash-generating unit

Question

Quizplus · Accepted Answer

The recoverable amount of the cash-generating unit is calculated as the greater of the implied fair value of the cash-generating unit and the value in use of the cash-generating unit. This is because the recoverable amount must be compared to the carrying amount of the cash-generating unit in order to determine if there is impairment of goodwill.

When Testing for Impairment of Goodwill,the Recoverable Amount of the Cash-Generating