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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)?

A. Deduction from net income.

B. Investing and financing activity not affecting cash.

C. Cash flow from investing activities.

D. Addition to net income.

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Question ajoutée par Utilisateur supprimé
Date de publication: 2015/11/06
Mohamed Ismael Ahmed, CPA, CMA, SOCPA
par Mohamed Ismael Ahmed, CPA, CMA, SOCPA , Finance Director , DHB Group

D. Addition to net income.

Satish Damodaran
par Satish Damodaran , BRANCH ACCOUNTANT , PETRASCO

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
par Ahmed kandil , Cost Controller , Battour Holding Cpompany

D. Addition to net income.

is the correct answer

thanks

 

 

Gladys Hazel Suycano CPA
par Gladys Hazel Suycano CPA , Accountant , Williams Business Consultancy DMCC

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

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