When using the indirect method to prepare the statement of cash flows, the impairment of goodwill should be
presented as a (n)?

Question

A. Deduction from net income.

B. Investing and financing activity not affecting cash.

C. Cash flow from investing activities.

D. Addition to net income.

Mohamed Ismael Ahmed, CPA, CMA, SOCPA · Answer

D. Addition to net income.

Satish Damodaran · Answer

The impairment of goodwill reduces net income but it is a non-cash transaction. In calculating net cash flows from operating activities under the indirect method, the amount of the impairment needs to be added back to net income.

Ahmed kandil · Answer

D. Addition to net income.

is the correct answer

thanks

Gladys Hazel Suycano CPA · Answer

The Answer is A. Deduction from net income since it is a non cash item.

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When using the indirect method to prepare the statement of cash flows, the impairment of goodwill should be presented as a (n)?

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