When is a goodwill impairment loss recognized?
A) Annually on a systematic and rational basis.
B) Never.
C) When both the fair value of a reporting unit and its associated implied goodwill fall below their respective carrying values.
D) If the fair value of a reporting unit falls below its original acquisition price.
E) Whenever the fair value of the entity declines significantly.

Question

Quizplus · Accepted Answer

A goodwill impairment loss is recognized when the fair value of a reporting unit and its associated implied goodwill fall below their respective carrying values, indicating that the asset is not recoverable.

When Is a Goodwill Impairment Loss Recognized