Which of the following statements best describes when goodwill should be tested for impairment under IFRS?
A)Goodwill should be tested for impairment when events or changes in circumstance indicate that impairment may have occurred.
B)Goodwill should be tested annually for impairment regardless of the circumstances.
C)Goodwill should be tested for impairment annually and whenever events or changes in circumstance indicate that impairment may have occurred.
D)Goodwill should only be tested for impairment when the company follows a policy to amortize its goodwill.

Question

Quizplus · Accepted Answer

Under IFRS, goodwill should be tested for impairment annually and whenever events or changes in circumstance indicate that impairment may have occurred. This approach is known as the "trigger-based" approach to impairment testing. It is in contrast to the US GAAP approach, which requires annual impairment testing, regardless of whether there are any indications of impairment. Additionally, IFRS prohibits the amortization of goodwill.

Which of the Following Statements Best Describes When Goodwill Should