Question 14 (1 point) On January 1, 2020, Cap Minerals Ltd. ("Cap") acquired the assets of a company and determined that there was goodwill. Assuming that Cap prepares its financial statements under IFRS, how should the company account for the goodwill for the year ended December 31, 2020 and subsequent years? There should be annual impairment testing, any impairment in value should be charged to net income and if the asset recovers in value the write-down can be reversed. There should be a recoverability test carried out and if the carrying value is not less than the estimated undiscounted future cash flows then Cap would continue to carry the goodwill at the purchase price. The company should assess for indications of impairment and if no indications of impairment then Cap would continue to carry the goodwill at the purchase price. There should be annual impairment testing, any impairment in value should be charged to net income and the reduced value cannot be reversed if the asset recovers in value. Cap should not account for any impairment of the goodwill through its income statement; any decrease in value should be adjusted through retained earnings