According to GAAP regarding amortization of goodwill and other intangible assets, which of the following statements is true?
A) Goodwill recognized in consolidation must be amortized over 20 years.
B) Goodwill recognized in consolidation must be expensed in the period of acquisition.
C) Goodwill recognized in consolidation will not be amortized but subject to an annual test for impairment.
D) Goodwill recognized in consolidation can never be written off.
E) Goodwill recognized in consolidation must be amortized over 40 years.

Question

Quizplus · Accepted Answer

Goodwill recognized in consolidation will not be amortized but subject to an annual test for impairment. This is in accordance with GAAP, where acquired goodwill and intangible assets with indefinite useful lives are tested for impairment at least annually and written down if their carrying value exceeds their fair value.

According to GAAP Regarding Amortization of Goodwill and Other Intangible