Course Title: ACCT 4312: Advanced Accounting Instructor: Dr Barbara L’Huillier Name: Yasmeen Al Jishi ID#: 200700687 Chapter2

What is the meant by reporting unit? Reporting unit is the level at which management reviews and assesses the operating segment's performance. Or, discrete business line or units that can be grouped by geography and can produce stand alone financial statement.

A company can use a reporting unit one level below the operating segment for impairment testing if components of an operating segment engage in business activity for which discrete financial information is available, have economic characteristics different from the other components of operating segments, and are at level at which goodwill benefits are realized.

What is meant by leveraged buyout? A leveraged buyout (LBO) occurs when a group of employees (generally a management group) and third-party investors create a new company to acquire all the outstanding common shares of their employer company.

The management group: contributes the stock they hold to the new corporation and Borrows sufficient funds to acquire the remainder of the common stock.

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