The IASB standard (IFRS 3 Business Combinations) issued with respect to the treatment of negative goodwill requires that: A. it must be recognized in income immediately as an extraordinary item. B. it must be recognized in income immediately. C. it can be deferred and amortized over a maximum of 40 years. D. it must be reflected as an increase in Liabilities and a Reduction in Capital for the Parent Company.

Mm.2.

Goodwill is an intangible asset that firms report on their respective balance sheet as a result of acquiring other firms. Goodwill has an indefinite life and should not be amortized. It should however be tested for impairment whenever the firms’ financial statements are used for public or are submitted for external financing. In a two-page analysis, 1). Describe the procedures prescribed by both USGAAP and IFRS to test for goodwill impairment and,2). How do these procedures differ from the procedure followed for testing the impairment of a fixed asset or an intangible asset that has a finite life.

Which of the following statements regarding IFRS accounting for goodwill is/are incorrect: (i)            Negative goodwill is reported as a liability  (ii)          A goodwill impairment expense decreases the carrying amount of goodwill on the consolidated SoFP  (iii)         The calculation of goodwill at acquisition date must include the fair value of non-controlling interests in the acquiree

In reference to the determination of goodwill impairment, which of the following statements is correct? Question 2Answer a. The goodwill impairment test under ASC 350-20-35 is a three-step process. b. Under FASB, firms must first compare carrying values (book values) at the headquarter level. c. Firms can reverse previously recognized impairment losses. d. If the reporting unit's fair value exceeds its carrying value, goodwill is unimpaired.

The meaning of goodwill in accounting is: Multiple Choice   The amount by which a company's value exceeds the value of its individual assets and liabilities.   Long term assets held as investment.   The support of the board of directors for the operating decisions of management.   The cost of developing, maintaining, or enhancing the value of a trademark.   Rights granted to an entity to deliver a product or service under specified conditions.

25.   A parent company’s investment account would include an element which is representative of :   Multiple Choice   the unrecorded difference between fair value and book value of the investee’s assets.   the unrecorded book value of the investor’s assets.   the goodwill accrued since the purchase of the investee.   the recorded current value of the investee’s assets.

For financial reporting purposes, GAAP requires organization costs to be   capitalized and treated as an intangible asset with an indefinite life.   capitalized and amortized over the first five years of the company's existence.   expensed in the period in which they are incurred.   capitalized and amortized over 20 years.

Select from the option list provided the most likely classification(s) of net assets, if any, that are affected by each transaction of a not-for-profit entity. The entity reports the minimum required classes of net assets. Each choice may be used once, more than once, or not at all. Transaction Answer 1. Legally restricted gains. 2. Expenses reported by functional classification. 3. Contributions of services that do not create or enhance nonfinancial assets or require special skills. 4. Costs of collection items not capitalized by the NFP. 5. Board-designated endowment. 6. Expenses reported by natural classification. 7. Conditional promise to give if the barrier has not been overcome. 8. Unconditional promises to give cash with amounts due in future periods. 9. Receipt of a gift restricted to acquisition of a long-lived asset that has been placed in service. The entity chooses to imply a time restriction over the life of the asset. 10. Investment return on a donor-restricted

What is the accounting treatment for discontinued operations? A :    It is reported at its gross amount as an "other revenue or gain" or "other expense or loss".    B :    It is reported as an "other revenue or gain" or "other expense and loss", net of tax.    C :    It only needs to be disclosed in the footnotes of the financial statements.    D :    It may be treated as sales revenue (if it is a gain) and as an operating expense (if it is a loss).