Under the parent-company extension method, to which company should the impairment of goodwill be attributed?
A)Solely to the parent company
B)Solely to the subsidiary company
C)Allocated between the parent and subsidiary companies
D)No attribution of goodwill is shown under this method.

Question

Quizplus · Accepted Answer

Under the parent-company extension method, the impairment of goodwill is attributed solely to the parent company because this method recognizes the investment in the subsidiary and the goodwill arising from the acquisition on the parent's books, not on the consolidated or subsidiary's books.

Under the Parent-Company Extension Method, to Which Company Should the Impairment