Ma2. According to the FASB ASC regarding the testing procedures for GoodwillImpairment, the proper procedure for conducting impairment testing is:Goodwill recognized in consolidation may be amortized uniformly and onlytested if the amortization method originally chosen is changed.Goodwill recognized in consolidation must only be impairment tested prior todisposal of the consolidated unit to eliminate the impairment of goodwill fromthe gain or loss on the sale of that specific entity.Goodwill recognized in consolidation may be impairment tested in a two-stepapproach, first by quantitative assessment of the possible impairment of the faivalue of the unit relative to the book value, and then a qualitative assessment ato why the impairment, if any, occurred for disclosure.Goodwill recognized in consolidation may be impairment tested in a two-stepapproach, first by qualitative assessment of the possibility of impairment of theunit fair value relative to the book value, and then quantitative assessments as tohow much impairment, if any, occurred for disclosure.

The correct answer is: (D) Goodwill recognised in consolidation may be impairment tested in a…

Answered: According to the FASB ASC regarding the…

According to the FASB ASC regarding the testing procedures for Goodwill Impairment, the proper procedure for conducting impairment testing is:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Ma2.

According to the FASB ASC regarding the testing procedures for Goodwill
Impairment, the proper procedure for conducting impairment testing is:
Goodwill recognized in consolidation may be amortized uniformly and only
tested if the amortization method originally chosen is changed.
Goodwill recognized in consolidation must only be impairment tested prior to
disposal of the consolidated unit to eliminate the impairment of goodwill from
the gain or loss on the sale of that specific entity.
Goodwill recognized in consolidation may be impairment tested in a two-step
approach, first by quantitative assessment of the possible impairment of the fai
value of the unit relative to the book value, and then a qualitative assessment a
to why the impairment, if any, occurred for disclosure.
Goodwill recognized in consolidation may be impairment tested in a two-step
approach, first by qualitative assessment of the possibility of impairment of the
unit fair value relative to the book value, and then quantitative assessments as to
how much impairment, if any, occurred for disclosure.

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