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A public company ( Alfa ) acquired another company ( Beta ) , recognized $ 4 5 million in goodwill, and made Beta a division
A public company Alfa acquired another company Beta recognized $ million in goodwill, and made Beta a division of Alfa. Three years later, Alfa does the impairment test of the goodwill related to Beta. Beta's book value was $ million. Beta's fair value was $ million. How much will the impairment loss be
a $ million
b $
c $ million
d Cannot be determined
Go back to the previous question and presume that Beta's book value was $ million and the market value was $ million. How much will the impairment loss be
a $ million
b $
c $ million
d Cannot be determined
Suppose that, once acquired, Beta's operations were mixed with the rest of Alpha's operations, such that it is not possible to determine the book value and market value of what was Beta. How is the quantitative impairment test done?
a It recognizes $ impairment loss and explains the reasons for not testing.
b All the goodwill that Beta had before mixing with the rest of Alpha is recognized as a loss
c Alfa's book value is compared to its market value to determine if there is impairment.
d None of the above
A company decides to carry out the qualitative goodwill test to determine whether there is impairment. Which of the following factors will it consider?
a Macroeconomic factors such as a general deterioration in the economy
b Industry or market factors such as deterioration of the environment in which the company operates
c Inflationary factors that greatly increase the costs of raw materials and other resources.
d All of the above.
A company is constructing its own manufacturing building. Which of the following statements is are true?
a If the construction is financed with debt, it will capitalize the interest incurred during construction.
b If the construction is financed with equity securities it will capitalize the cost of financing with equity incurred during construction.
c If construction is funded internally, it will capitalize the opportunity cost incurred during construction.
d All assertions are true.
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