Under AASB 136 Impairment of Assets,the impairment testing of goodwill occurs at the:
A)level of the entity itself.
B)lowest level at which goodwill is allocated to cash-generating units.
C)combined segments level.
D)operating division level.

Question

Quizplus · Accepted Answer

According to AASB 136, goodwill should be allocated to the cash-generating units (CGUs) that are expected to benefit from their synergies. Therefore, impairment testing of goodwill should occur at the lowest level at which goodwill is allocated to CGUs. This is because impairment testing should be performed at the level at which the goodwill generating unit is being actively managed, and CGUs are typically the level at which management makes decisions about resources allocation and performance evaluation.

Under AASB 136 Impairment of Assets,the Impairment Testing of Goodwill