How is the valuation and testing of goodwill for impairment best facilitated by a company?
A)Through physical inspection of the goodwill.
B)By the CPA firm hired to perform the audit of financial statements.
C)With the use of a formal budgeting process.
D)Through the development of new products and services.

Question

Quizplus · Accepted Answer

A formal budgeting process helps in estimating future cash flows and assessing whether the carrying amount of goodwill is recoverable, which is essential for impairment testing.

How Is the Valuation and Testing of Goodwill for Impairment