WGU D252 SKM1 Task 2 — Goodwill Impairment (2026/2027 Update) Complete Solution Exam
WGU D252 SKM1 Task 2
Goodwill Impairment — 2026/2027 Update
Complete Solution Exam (100 Questions)
Western Governors University — Performance Assessment Preparation
Purpose: This 100-question exam is structured to mirror the WGU D252 SKM1 Task 2 Goodwill Impairment
performance assessment rubric and the 2026/2027 FASB/ASU guidance. Cognitive distribution is approximately 25%
recall, 55% application, and 20% analysis. Every question provides a complete solution rationale that walks through the
calculation, ASC citation, journal entry mechanic, or Task 2 written-analysis expectation so the candidate can both practice
and self-remediate. Use this exam as a closed-book simulation (2 hours, 100 questions) and then re-attempt incorrect items
open-book with the rationale exposed. The eight sections align to the Task 2 competency areas: (1) Goodwill fundamentals
and recognition, (2) Impairment standards and framework, (3) Reporting units and asset groups, (4) Quantitative
impairment testing, (5) Step 1 and Step 2 analysis, (6) Tax implications and deferred taxes, (7) Financial statement
presentation and disclosure, and (8) Task 2 application and competency integration. As of the 2026/2027 cycle, the
private-company alternative under ASC 350-20-35-8A (amortization election) and ASU 2017-04 (simplified Step 1-only
test for public business entities) remain the most heavily tested areas.
SECTION 1: Goodwill Fundamentals and Recognition (Definition,
Acquisition Method, & Initial Measurement)
Questions 1–12 cover the nature of goodwill, ASC 805 acquisition method, initial measurement at the
acquisition date, components of goodwill (going concern, synergies, residual intangibles), and bargain purchase
(negative goodwill) treatment.
Q1: Under ASC 805, which of the following best describes the nature of goodwill recognized in
a business combination?
A. A separately identifiable intangible asset that can be sold independently of the business.
B. An intangible asset arising from a business combination representing the excess of consideration
transferred over the acquirer's interest in the net fair value of identifiable assets and liabilities.
[CORRECT]
C. An internally generated asset representing brand reputation created through advertising expenditures.
D. A contingent asset recognized only when the acquirer expects future synergies to materialize.
Correct Answer: B
Rationale:
Goodwill is defined under ASC 805-10-20 as an intangible asset that arises as a result of a business combination and is
recognized for the excess of the consideration transferred over the acquirer's interest in the net identifiable assets at fair
value. It is NOT separately identifiable, cannot be sold apart from the business, and is NEVER internally generated (ASC
350-30-25-4 prohibits capitalizing internally generated goodwill). For WGU Task 2, candidates must articulate this
definition verbatim in the written narrative and tie it to the acquisition-method framework. Options A and C are incorrect
because goodwill is not separately salable or internally generated; Option D mischaracterizes goodwill as contingent when
it is in fact recognized at the acquisition date.
D252 SKM1 Task 2 — 100-Question Complete Solution Exam Page 1
,WGU D252 SKM1 Task 2 — Goodwill Impairment (2026/2027 Update) Complete Solution Exam
Q2: Under the acquisition method (ASC 805-20), goodwill is initially measured as:
A. Consideration transferred minus the book value of the acquiree's net assets.
B. The acquirer's interest in the fair value of identifiable net assets minus consideration transferred.
C. Consideration transferred plus the fair value of any noncontrolling interest, minus the acquirer's interest
in the fair value of identifiable net assets acquired. [CORRECT]
D. The fair value of the acquiree's common shares outstanding on the acquisition date.
Correct Answer: C
Rationale:
ASC 805-30-30-1 establishes the goodwill measurement formula: Consideration Transferred + Noncontrolling Interest at
Fair Value + Previously Held Interest at Fair Value − Acquirer's Interest in Identifiable Net Assets at Fair Value =
Goodwill. Option A incorrectly uses book value; Option B reverses the formula (this would be the
bargain-purchase/negative-goodwill calculation); Option D captures only one component (equity value) and ignores
liabilities, NCI, and prior interests. For Task 2, candidates should write the formula in this exact sequence to maximize the
rubric's calculation-accuracy points.
Q3: Lakeside Corp. acquires 100% of Riverbed Co. for $5,200,000 cash. Riverbed's identifiable
net assets have a fair value of $4,350,000 (book value $4,100,000). What amount of goodwill
should Lakeside recognize?
A. $850,000 [CORRECT]
B. $1,100,000
C. $1,850,000
D. $5,200,000
Correct Answer: A
Rationale:
Goodwill = Consideration Transferred − Acquirer's Interest in Fair Value of Identifiable Net Assets. With 100%
acquisition and no NCI, the calculation is $5,200,000 − $4,350,000 = $850,000. Option B ($1,100,000) incorrectly uses
book value of net assets ($5,200,000 − $4,100,000), which violates ASC 805-30-30-1's fair-value requirement. Option C
incorrectly adds consideration and net asset fair value. Option D records the entire purchase price as goodwill, ignoring the
identifiable net assets. In Task 2 written analysis, state the formula, substitute the figures with labels, and present the
$850,000 result with a brief justification that fair value (not book) is required.
D252 SKM1 Task 2 — 100-Question Complete Solution Exam Page 2
,WGU D252 SKM1 Task 2 — Goodwill Impairment (2026/2027 Update) Complete Solution Exam
Q4: Which of the following is NOT a component of goodwill as described in ASC 805-30-30
and FASB Concepts Statement No. 6?
A. Going-concern value of the acquiree's existing business.
B. Expected synergies from combining the acquiree's business with the acquirer's business.
C. The fair value of identifiable intangible assets such as customer lists and patents. [CORRECT]
D. Intangible assets that do not qualify for separate recognition (e.g., assembled workforce).
Correct Answer: C
Rationale:
ASC 805-30-30-12 describes six components of goodwill: (a) going-concern value, (b) assembled workforce, (c) excess
earning power not separable from goodwill, (d) expected synergies, (e) intangible assets that do not qualify for separate
recognition, and (f) overpayment/underpayment by the acquirer. Option C — the fair value of IDENTIFIABLE intangibles
(customer lists, patents) — is recognized SEPARATELY from goodwill under ASC 805-20-25, not embedded within it.
Distinguishing "separately recognizable" intangibles from goodwill-residual intangibles is a frequent Task 2 calculation
point: an acquirer that fails to identify a customer list ($500,000) will inflate goodwill by that same $500,000.
Q5: Aurora Inc. acquires Bluebird Ltd. for $12,000,000 cash. The fair value of Bluebird's
identifiable net assets is $13,400,000 (no noncontrolling interest, no previously held interest).
What is the appropriate accounting treatment?
A. Recognize goodwill of $1,400,000.
B. Recognize a bargain purchase gain of $1,400,000 in earnings. [CORRECT]
C. Recognize a deferred credit of $1,400,000 amortized over five years.
D. Reduce the consideration transferred to $13,400,000 and recognize no gain or goodwill.
Correct Answer: B
Rationale:
When consideration transferred is LESS than the acquirer's interest in the fair value of identifiable net assets, a bargain
purchase (negative goodwill) exists. Under ASC 805-30-25-4, the acquirer recognizes the resulting gain in earnings on the
acquisition date after a reassessment confirming that all identifiable assets and liabilities have been properly identified and
measured. Option A reverses the sign; Option C reflects an outdated pre-Codification treatment; Option D is incorrect
because the consideration actually paid is $12,000,000 — the $1,400,000 gain is recognized, not eliminated. Task 2
candidates must mention the ASC 805-30-50-3 disclosure requirement to reassess before recognizing the gain.
D252 SKM1 Task 2 — 100-Question Complete Solution Exam Page 3
, WGU D252 SKM1 Task 2 — Goodwill Impairment (2026/2027 Update) Complete Solution Exam
Q6: In a business combination, an acquiree has an assembled workforce with an estimated
fair value of $2,000,000. Under ASC 805, how should the acquirer account for this workforce?
A. Recognize a $2,000,000 intangible asset called "assembled workforce."
B. Capitalize the $2,000,000 as part of a separately recognized "human capital" intangible.
C. Do not recognize the workforce as a separate intangible; its value is subsumed in goodwill. [CORRECT]
D. Expense the $2,000,000 immediately as acquired restructuring costs.
Correct Answer: C
Rationale:
ASC 805-20-25-15 specifically excludes an assembled workforce from separate recognition because a workforce does not
meet the contractual-legal or separability criteria of ASC 805-20-25-12 through 25-16. The fair value of the workforce is
therefore subsumed into goodwill. Options A and B incorrectly imply separate recognition; Option D would only apply if
the workforce-related costs were post-combination compensation expense, not the pre-existing assembled workforce. For
Task 2, mention the contractual-legal/separability test explicitly to satisfy the rubric's "identify intangibles" criterion.
Q7: Cascade Corp. paid $8,000,000 to acquire Delta Co. Delta's identifiable net assets at fair
value were $6,500,000, of which identifiable intangible assets (customer list $800,000;
trademark $1,200,000) totaled $2,000,000. Which statement is correct?
A. Goodwill is $1,500,000 and the $2,000,000 identifiable intangibles are part of goodwill.
B. Goodwill is $1,500,000; the $2,000,000 identifiable intangibles are recognized separately from goodwill.
[CORRECT]
C. Goodwill is $3,500,000 and the $2,000,000 identifiable intangibles are recognized separately.
D. Goodwill is $1,500,000 and the $2,000,000 identifiable intangibles are expensed immediately.
Correct Answer: B
Rationale:
Goodwill = $8,000,000 − $6,500,000 = $1,500,000. The $2,000,000 of identifiable intangibles (customer list $800,000 +
trademark $1,200,000) is INCLUDED within the $6,500,000 fair value of identifiable net assets and is therefore
recognized SEPARATELY under ASC 805-20 — it is NOT inside goodwill. Option A incorrectly bundles the identifiable
intangibles into goodwill; Option C double-counts by adding them again to the goodwill residual; Option D is wrong
because identifiable intangibles are capitalized, not expensed. Task 2 written analysis should explicitly distinguish the
$2,000,000 recognized intangibles from the $1,500,000 goodwill residual.
D252 SKM1 Task 2 — 100-Question Complete Solution Exam Page 4
WGU D252 SKM1 Task 2
Goodwill Impairment — 2026/2027 Update
Complete Solution Exam (100 Questions)
Western Governors University — Performance Assessment Preparation
Purpose: This 100-question exam is structured to mirror the WGU D252 SKM1 Task 2 Goodwill Impairment
performance assessment rubric and the 2026/2027 FASB/ASU guidance. Cognitive distribution is approximately 25%
recall, 55% application, and 20% analysis. Every question provides a complete solution rationale that walks through the
calculation, ASC citation, journal entry mechanic, or Task 2 written-analysis expectation so the candidate can both practice
and self-remediate. Use this exam as a closed-book simulation (2 hours, 100 questions) and then re-attempt incorrect items
open-book with the rationale exposed. The eight sections align to the Task 2 competency areas: (1) Goodwill fundamentals
and recognition, (2) Impairment standards and framework, (3) Reporting units and asset groups, (4) Quantitative
impairment testing, (5) Step 1 and Step 2 analysis, (6) Tax implications and deferred taxes, (7) Financial statement
presentation and disclosure, and (8) Task 2 application and competency integration. As of the 2026/2027 cycle, the
private-company alternative under ASC 350-20-35-8A (amortization election) and ASU 2017-04 (simplified Step 1-only
test for public business entities) remain the most heavily tested areas.
SECTION 1: Goodwill Fundamentals and Recognition (Definition,
Acquisition Method, & Initial Measurement)
Questions 1–12 cover the nature of goodwill, ASC 805 acquisition method, initial measurement at the
acquisition date, components of goodwill (going concern, synergies, residual intangibles), and bargain purchase
(negative goodwill) treatment.
Q1: Under ASC 805, which of the following best describes the nature of goodwill recognized in
a business combination?
A. A separately identifiable intangible asset that can be sold independently of the business.
B. An intangible asset arising from a business combination representing the excess of consideration
transferred over the acquirer's interest in the net fair value of identifiable assets and liabilities.
[CORRECT]
C. An internally generated asset representing brand reputation created through advertising expenditures.
D. A contingent asset recognized only when the acquirer expects future synergies to materialize.
Correct Answer: B
Rationale:
Goodwill is defined under ASC 805-10-20 as an intangible asset that arises as a result of a business combination and is
recognized for the excess of the consideration transferred over the acquirer's interest in the net identifiable assets at fair
value. It is NOT separately identifiable, cannot be sold apart from the business, and is NEVER internally generated (ASC
350-30-25-4 prohibits capitalizing internally generated goodwill). For WGU Task 2, candidates must articulate this
definition verbatim in the written narrative and tie it to the acquisition-method framework. Options A and C are incorrect
because goodwill is not separately salable or internally generated; Option D mischaracterizes goodwill as contingent when
it is in fact recognized at the acquisition date.
D252 SKM1 Task 2 — 100-Question Complete Solution Exam Page 1
,WGU D252 SKM1 Task 2 — Goodwill Impairment (2026/2027 Update) Complete Solution Exam
Q2: Under the acquisition method (ASC 805-20), goodwill is initially measured as:
A. Consideration transferred minus the book value of the acquiree's net assets.
B. The acquirer's interest in the fair value of identifiable net assets minus consideration transferred.
C. Consideration transferred plus the fair value of any noncontrolling interest, minus the acquirer's interest
in the fair value of identifiable net assets acquired. [CORRECT]
D. The fair value of the acquiree's common shares outstanding on the acquisition date.
Correct Answer: C
Rationale:
ASC 805-30-30-1 establishes the goodwill measurement formula: Consideration Transferred + Noncontrolling Interest at
Fair Value + Previously Held Interest at Fair Value − Acquirer's Interest in Identifiable Net Assets at Fair Value =
Goodwill. Option A incorrectly uses book value; Option B reverses the formula (this would be the
bargain-purchase/negative-goodwill calculation); Option D captures only one component (equity value) and ignores
liabilities, NCI, and prior interests. For Task 2, candidates should write the formula in this exact sequence to maximize the
rubric's calculation-accuracy points.
Q3: Lakeside Corp. acquires 100% of Riverbed Co. for $5,200,000 cash. Riverbed's identifiable
net assets have a fair value of $4,350,000 (book value $4,100,000). What amount of goodwill
should Lakeside recognize?
A. $850,000 [CORRECT]
B. $1,100,000
C. $1,850,000
D. $5,200,000
Correct Answer: A
Rationale:
Goodwill = Consideration Transferred − Acquirer's Interest in Fair Value of Identifiable Net Assets. With 100%
acquisition and no NCI, the calculation is $5,200,000 − $4,350,000 = $850,000. Option B ($1,100,000) incorrectly uses
book value of net assets ($5,200,000 − $4,100,000), which violates ASC 805-30-30-1's fair-value requirement. Option C
incorrectly adds consideration and net asset fair value. Option D records the entire purchase price as goodwill, ignoring the
identifiable net assets. In Task 2 written analysis, state the formula, substitute the figures with labels, and present the
$850,000 result with a brief justification that fair value (not book) is required.
D252 SKM1 Task 2 — 100-Question Complete Solution Exam Page 2
,WGU D252 SKM1 Task 2 — Goodwill Impairment (2026/2027 Update) Complete Solution Exam
Q4: Which of the following is NOT a component of goodwill as described in ASC 805-30-30
and FASB Concepts Statement No. 6?
A. Going-concern value of the acquiree's existing business.
B. Expected synergies from combining the acquiree's business with the acquirer's business.
C. The fair value of identifiable intangible assets such as customer lists and patents. [CORRECT]
D. Intangible assets that do not qualify for separate recognition (e.g., assembled workforce).
Correct Answer: C
Rationale:
ASC 805-30-30-12 describes six components of goodwill: (a) going-concern value, (b) assembled workforce, (c) excess
earning power not separable from goodwill, (d) expected synergies, (e) intangible assets that do not qualify for separate
recognition, and (f) overpayment/underpayment by the acquirer. Option C — the fair value of IDENTIFIABLE intangibles
(customer lists, patents) — is recognized SEPARATELY from goodwill under ASC 805-20-25, not embedded within it.
Distinguishing "separately recognizable" intangibles from goodwill-residual intangibles is a frequent Task 2 calculation
point: an acquirer that fails to identify a customer list ($500,000) will inflate goodwill by that same $500,000.
Q5: Aurora Inc. acquires Bluebird Ltd. for $12,000,000 cash. The fair value of Bluebird's
identifiable net assets is $13,400,000 (no noncontrolling interest, no previously held interest).
What is the appropriate accounting treatment?
A. Recognize goodwill of $1,400,000.
B. Recognize a bargain purchase gain of $1,400,000 in earnings. [CORRECT]
C. Recognize a deferred credit of $1,400,000 amortized over five years.
D. Reduce the consideration transferred to $13,400,000 and recognize no gain or goodwill.
Correct Answer: B
Rationale:
When consideration transferred is LESS than the acquirer's interest in the fair value of identifiable net assets, a bargain
purchase (negative goodwill) exists. Under ASC 805-30-25-4, the acquirer recognizes the resulting gain in earnings on the
acquisition date after a reassessment confirming that all identifiable assets and liabilities have been properly identified and
measured. Option A reverses the sign; Option C reflects an outdated pre-Codification treatment; Option D is incorrect
because the consideration actually paid is $12,000,000 — the $1,400,000 gain is recognized, not eliminated. Task 2
candidates must mention the ASC 805-30-50-3 disclosure requirement to reassess before recognizing the gain.
D252 SKM1 Task 2 — 100-Question Complete Solution Exam Page 3
, WGU D252 SKM1 Task 2 — Goodwill Impairment (2026/2027 Update) Complete Solution Exam
Q6: In a business combination, an acquiree has an assembled workforce with an estimated
fair value of $2,000,000. Under ASC 805, how should the acquirer account for this workforce?
A. Recognize a $2,000,000 intangible asset called "assembled workforce."
B. Capitalize the $2,000,000 as part of a separately recognized "human capital" intangible.
C. Do not recognize the workforce as a separate intangible; its value is subsumed in goodwill. [CORRECT]
D. Expense the $2,000,000 immediately as acquired restructuring costs.
Correct Answer: C
Rationale:
ASC 805-20-25-15 specifically excludes an assembled workforce from separate recognition because a workforce does not
meet the contractual-legal or separability criteria of ASC 805-20-25-12 through 25-16. The fair value of the workforce is
therefore subsumed into goodwill. Options A and B incorrectly imply separate recognition; Option D would only apply if
the workforce-related costs were post-combination compensation expense, not the pre-existing assembled workforce. For
Task 2, mention the contractual-legal/separability test explicitly to satisfy the rubric's "identify intangibles" criterion.
Q7: Cascade Corp. paid $8,000,000 to acquire Delta Co. Delta's identifiable net assets at fair
value were $6,500,000, of which identifiable intangible assets (customer list $800,000;
trademark $1,200,000) totaled $2,000,000. Which statement is correct?
A. Goodwill is $1,500,000 and the $2,000,000 identifiable intangibles are part of goodwill.
B. Goodwill is $1,500,000; the $2,000,000 identifiable intangibles are recognized separately from goodwill.
[CORRECT]
C. Goodwill is $3,500,000 and the $2,000,000 identifiable intangibles are recognized separately.
D. Goodwill is $1,500,000 and the $2,000,000 identifiable intangibles are expensed immediately.
Correct Answer: B
Rationale:
Goodwill = $8,000,000 − $6,500,000 = $1,500,000. The $2,000,000 of identifiable intangibles (customer list $800,000 +
trademark $1,200,000) is INCLUDED within the $6,500,000 fair value of identifiable net assets and is therefore
recognized SEPARATELY under ASC 805-20 — it is NOT inside goodwill. Option A incorrectly bundles the identifiable
intangibles into goodwill; Option C double-counts by adding them again to the goodwill residual; Option D is wrong
because identifiable intangibles are capitalized, not expensed. Task 2 written analysis should explicitly distinguish the
$2,000,000 recognized intangibles from the $1,500,000 goodwill residual.
D252 SKM1 Task 2 — 100-Question Complete Solution Exam Page 4
