U.S.GAAP or IFRS require firms to test
A)annually for impairment losses on goodwill.
B)whenever there is an indication of impairment due to changes in the legal or economic climate.
C)whenever there is an indication of impairment due to adverse regulatory conditions.
D)whenever there is an indication of impairment due to loss of key personnel.
E)all of the above

Question

Quizplus · Accepted Answer

Both U.S. GAAP and IFRS require firms to test annually for impairment losses on goodwill (A) and also to test for impairment whenever there is an indication that an asset may be impaired, which could be due to changes in the legal or economic climate (B), adverse regulatory conditions (C), or loss of key personnel (D). These indicators are not exhaustive but represent common reasons that might lead a firm to believe an asset's carrying amount may not be recoverable.

U.S.GAAP or IFRS Require Firms to Test