In reference to international accounting for goodwill,U.S.companies have complained that past U.S.accounting rules for goodwill placed them at a disadvantage in competing against foreign companies for merger partners.Why?
A)Previous rules required immediate write off of goodwill which resulted in a one-time expense that was not required under international rules.
B)Previous rules required amortization of goodwill which resulted in an ongoing expense that was not required under international rules.
C)Previous rules did not permit the recording of goodwill,thus resulting in a lower asset base than international counterparts would recognize.
D)Previous rules required the immediate write of goodwill to stockholder's equity.

Question

Quizplus · Accepted Answer

Previous U.S. accounting rules for goodwill required amortization, which resulted in an ongoing expense that was not required under international rules. This ongoing expense made U.S. companies less attractive merger partners compared to foreign companies who did not have to incur this expense.

In Reference to International Accounting for Goodwill,U