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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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