Bear & Brothers Boating manufactures custom yachts and wooden vessels. They have a CGU with $5 million worth of goodwill allocated to it. Only the goodwill need be tested for impairment annually.

Question

Quizplus · Accepted Answer

Goodwill should be tested for impairment annually, but not in isolation. The entire Cash Generating Unit (CGU) to which the goodwill has been allocated should be tested for impairment. This means evaluating if the carrying amount of the CGU, including goodwill, exceeds its recoverable amount.

Bear & Brothers Boating Manufactures Custom Yachts and Wooden Vessels