Following U.S. GAAP, goodwill acquired in a merger must be allocated to business units before it can be tested for impairment. How are these "business units" defined?

Question

Quizplus · Accepted Answer

Under U.S. GAAP, goodwill acquired in a merger is allocated to the reportable units that are expected to benefit from the synergies of the combination. These reportable units are used for segment reporting purposes, aligning the testing of goodwill impairment with the operational and financial structure of the organization as it is reported externally.