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      Question

      Goodwill acquired in a business combination must be

      tested annually for impairment. To which level should it be allocated for testing?
      A To individual assets within the unit. Correct Answer Incorrect Answer
      B To the reporting entity as a whole. Correct Answer Incorrect Answer
      C To the smallest CGU/group of CGUs expected to benefit, not larger than an operating segment. Correct Answer Incorrect Answer
      D Allocate only if impairment indicator exists. Correct Answer Incorrect Answer
      E Allocate to reserves in equity. Correct Answer Incorrect Answer

      Solution

      Goodwill must be allocated to the smallest cash-generating unit or group expected to benefit, consistent with monitoring, not exceeding an operating segment.

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