According to current accounting principles,for the purposes of testing impairment,goodwill resulting from the acquisition process must be identified
A)as an expense on the income statement.
B)on the books of the parent company.
C)on the basis of present value.
D)with an operating or reporting unit.

Question

Quizplus · Accepted Answer

Goodwill resulting from the acquisition process needs to be tested for impairment on the basis of an operating or reporting unit. This means that the goodwill must be allocated to the specific segment of the business that it relates to, and then tested for impairment based on the performance of that segment. This approach ensures that any impairment charges are allocated to the specific area that is responsible for the impairment, rather than affecting the overall financial statements of the parent company.

According to Current Accounting Principles,for the Purposes of Testing Impairment,goodwill