Under IFRS, which of the following statements best describes when goodwill should be tested for impairment?
A) Goodwill should be tested for impairment when events or changes in circumstance indicate that impairment may have occurred.
B) Goodwill should be tested annually for impairment regardless of the circumstances.
C) Goodwill should be tested for impairment annually and whenever events or changes in circumstance indicate that impairment may have occurred.
D) Goodwill should only be tested for impairment when the company follows a policy to amortize its goodwill.

Question

Quizplus · Accepted Answer

Under IFRS, goodwill should be tested for impairment annually and whenever events or changes in circumstance indicate that impairment may have occurred. This is known as the "triggering event" for impairment testing. It is not necessary to amortize goodwill under IFRS, and annual impairment testing is required regardless of any policy to amortize goodwill. Option A is partially correct but does not mention the requirement for annual testing. Option B is incorrect as it implies that impairment testing is only required annually and not when triggering events occur. Option D is incorrect as it suggests that impairment testing is only necessary if the company chooses to amortize its goodwill.

Under IFRS, Which of the Following Statements Best Describes When