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Questions and Answers
What is the primary reason for impairing goodwill?
What is the primary reason for impairing goodwill?
- Increase in future earning capacity
- Rise in the consumer confidence index
- Negative changes in the business environment (correct)
- Decrease in market interest rates
How does an increase in the fair value of net identifiable assets affect the valuation of goodwill?
How does an increase in the fair value of net identifiable assets affect the valuation of goodwill?
- Increases the valuation of goodwill
- Has no impact on the valuation of goodwill
- Makes the valuation uncertain
- Decreases the valuation of goodwill (correct)
Which of the following is a key factor in the valuation of goodwill?
Which of the following is a key factor in the valuation of goodwill?
- Current market value of the liabilities
- Number of shares outstanding
- Historical cost of the assets
- Brand reputation and customer loyalty (correct)
