Asked by Muwal Deepak on Jul 27, 2024
Verified
Goodwill acquired under a business combination is subject to an impairment test every:
A) year.
B) two years.
C) three years.
D) five years.
Goodwill
An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, reflecting the value of the business's reputation, brand, and other unquantifiable assets.
Impairment Test
A process used to determine if an asset's carrying amount exceeds its recoverable amount, indicating the asset may be impaired and its value should be written down.
Business Combination
The merger or acquisition of two or more companies to form a single business entity, often to enhance strategic positioning or achieve synergies.
- Recognize the necessity for annual impairment tests on specific asset categories.
Verified Answer
Learning Objectives
- Recognize the necessity for annual impairment tests on specific asset categories.
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