When consolidating a subsidiary under the equity method, which of the following statements is true?
A) Goodwill is never recognized.
B) Goodwill required is amortized over 20 years.
C) Goodwill may be recorded on the parent company's books.
D) The value of any goodwill should be tested annually for impairment in value.
E) Goodwill should be expensed in the year of acquisition.

Question

Quizplus · Accepted Answer

When consolidating a subsidiary under the equity method, goodwill may be recorded on the parent company's books. The value of any goodwill should be tested annually for impairment in value. It is not amortized over a fixed period of time, and it is not expensed in the year of acquisition.

When Consolidating a Subsidiary Under the Equity Method, Which of the Following