_____ Goodwill, when properly recognized, must be
A) Amortized only when appropriate.
B) Amortized over no more than 40 years in all cases.
C) Amortized or written down periodically, at management's discretion.
D) Amortized only if management has established a policy of amortizing goodwill.
E) None of the above.

Question

Quizplus · Accepted Answer

Goodwill is not amortized under current accounting standards (IFRS and US GAAP). Instead, it is subject to an annual impairment test, where its carrying value is compared to its recoverable amount, and any impairment loss is recognized in the income statement. The options suggesting amortization or management discretion in writing down goodwill do not align with these standards.

_____ Goodwill, When Properly Recognized, Must Be