Goodwill, Including Impairment (F4:M8)

Question 1

what is the maximum that goodwill impairment loss can be? (GAAP)

Answer 1

the amount of goodwill reflected on the balance sheet

Question 2

under GAAP, at what unit level is goodwill impairment calculated?

Answer 2

reporting unit level

Question 3

under IFRS, at what unit level is goodwill impairment calculated?

Answer 3

cash-generating unit level

Question 4

under IFRS, how is good will impairment calculated?

Answer 4

CV of CGU is compared with the GCU’s recoverable amount, which is greater of:
FV less costs to sell
and
value in use (PV of future CF expected)

Question 5

under IFRS, how is impairment loss allocated?

Answer 5

first to goodwill then to the other assets of the CGU on a pro rata basis

Question 6

under GAAP, when is goodwill impaired?

Answer 6

CV of reporting unit including GW exceeds its FV including GW

Question 7

T or F, an asset group should be tested for impairment loss before goodwill is tested.

Answer 7

T