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Goodwill allocated to a CGU CANNOT be tested on a non-arbitrary basis at the individual CGU level. The lowest level at which it is monitored for INTERNAL management purposes is an operating segment. Goodwill must be tested at:
AThe country level
BThe entity as a whole
CThe lowest level at which goodwill is monitored internally — but NOT LARGER than an operating segment per Ind AS 108 (pre-aggregation)
DThe individual CGU level (it must always be tested at the lowest possible level)
Answer & Solution
Correct answer: C. The lowest level at which goodwill is monitored internally — but NOT LARGER than an operating segment per Ind AS 108 (pre-aggregation)
Ind AS 36 paragraph 80: goodwill is tested at the lowest level monitored internally, capped at operating segment level (before any aggregation permitted by Ind AS 108). This balances meaningful testing with practical aggregation.
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