According to SFAS 142, Goodwill and Other Intangible Assets, goodwill must be allocated among a firm s
Question:
According to SFAS 142, “Goodwill and Other Intangible Assets,” goodwill must be allocated among a firm s identified reporting units. If the fair value of a particular reporting unit with recognized goodwill falls below its carrying amount, which of the following is true?
a. No goodwill impairment loss is recognized unless the implied value for goodwill exceeds its car¬ rying amount. LO1
b. A goodwill impairment loss is recognized if the carrying amount for goodwill exceeds its implied value.
c. A goodwill impairment loss is recognized for the difference between the reporting unit’s fair value and carrying amount.
d. The reporting unit reduces the values assigned to its long-term assets (including any unrecognized intangibles) to reflect its fair value.
Step by Step Answer:
Advanced Accounting
ISBN: 9780073379456
9th Edition
Authors: Joe Ben Hoyle, Timothy S. Doupnik, Thomas F. Schaefer, Oe Ben Hoyle