Quick practice
Question 1 of 5
A firm recognizes a goodwill impairment in its most recent financial statement, reducing goodwill from $50 million to $40 million. How should an analyst most appropriately adjust this financial statement for goodwill when calculating financial ratios?
A
Make no adjustments to assets or earnings because both reflect the
impairment.
B
Decrease earnings but make no adjustment to assets.
C
Decrease assets and increase earnings.
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