Deck 14: Good will Impairment Test

Question 1

For private enterprises that have acquired goodwill in a business combination,how often should goodwill be tested for impairment?

A)At least once a year
B)At least once every two years
C)Whenever the parent company deems it necessary
D)Whenever there is a change in circumstances

Answer 1

D

Question 2

For private enterprises that have acquired goodwill in a business combination,which of the following is considered a change of circumstances for purposes of testing for goodwill impairment?

A)A large unfavourable income tax reassessment
B)Sale of a capital asset for a small loss
C)A major competitor has ceased operations
D)Retirement of the subsidiary's operations manager

Answer 2

A

Question 3

How should goodwill acquired in a business combination be allocated?

A)Proportionately to assets
B)Proportionately to fair-value increments
C)To cash-generating units
D)It is not allocated.

Answer 3

C

Question 4

Proudfoot Ltd.acquired all the shares of Jacob Ltd.several years ago.In conducting its goodwill impairment test for the current year,Proudfoot has determined that there has been an impairment related to revalued assets.On Proudfoot's consolidated financial statements,where should this impairment be reported?

A)As part of profit or loss
B)As part of other comprehensive income
C)As an adjustment to retained earnings
D)As a separate amount under shareholders' equity

Question 5

Compare and contrast the goodwill impairment test under IFRS and accounting standards for private enterprises (ASPE).

Question 6

How often should goodwill acquired in a business combination be tested for impairment?

A)Whenever there is an indication of impairment
B)Whenever there is a change in circumstances in the business
C)At least once a year
D)At least once every two years