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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.

Accounting Auditing US GAAP CMA
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Question added by Deleted user
Date Posted: 2015/11/06
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Mohamed Ismael Ahmed, CPA, CMA, SOCPA
by Mohamed Ismael Ahmed, CPA, CMA, SOCPA , Finance Director , DHB Group

D. Addition to net income.

Satish Damodaran
by 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
by Ahmed kandil , Cost Controller , Battour Holding Cpompany

D. Addition to net income.

is the correct answer

thanks

 

 

Gladys Hazel Suycano CPA
by 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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