The goodwill impairment test does not involve ________.
A)allocation of goodwill to reporting units
B)elimination of all goodwill as a consequence
C)estimation and judgement on the part of management
D)an opportunity for a "big bath"

Question

Quizplus · Accepted Answer

The goodwill impairment test does not involve the elimination of all goodwill as a consequence. It involves an analysis of the fair value of reporting units and the comparison of that value with their carrying value. Allocation of goodwill to reporting units, estimation and judgement on the part of management, and an opportunity for a "big bath" are all part of the goodwill impairment test.

The Goodwill Impairment Test Does Not Involve ________