Question
1. Which statement below is most likely to be false concerning the qualitative assessment for goodwill impairment? Select one: a. The assessment results in fewer
1. Which statement below is most likely to be false concerning the qualitative assessment for goodwill impairment?
Select one:
a. The assessment results in fewer earnings manipulations regarding impairment recognition.
b. The assessment allows entities to avoid the cost of impairment testing when it is likely that no impairment would be identified through quantitative tests.
c. The less time that has passed between the last fair value measurement and the current testing date, the easier it is to make a qualitative assessment of impairment.
d. If it is determined that there is a 45% chance the goodwill is impaired, no quantitative testing is required.
2. A subsidiary has plant assets with a fair value of $80 million and book value of $50 million at the date of acquisition. The plant assets have a remaining life, as of the date of acquisition, of 15 years, straight-line. You are consolidating the accounts at the end of the third year since acquisition, and the subsidiary still owns the plant assets. The amount by which the plant assets are revalued in eliminating entry (R) is:
Select one:
a. $24 million
b. $30 million
c. $26 million
d. $28 million
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