Which of the following factors would most likely trigger the need for impairment testing on the recorded goodwill of a nutritional products company?
A)the FDA halts the distribution of the acquired subsidiary's only product.
B)management hires a new tax director at the corporate level.
C)there is no doubt about the acquired subsidiary's ability to continue as a going concern.
D)goodwill testing occurred eight months previously.

Question

Quizplus · Accepted Answer

The FDA halting the distribution of the acquired subsidiary's only product would significantly impact the financial performance of the subsidiary and potentially lead to impairment of its goodwill. This would trigger the need for impairment testing to assess the fair value of the subsidiary and its assets. The other options do not indicate any significant changes or events that would require impairments testing.

Which of the Following Factors Would Most Likely Trigger the Need