Which of the following statements is correct regarding accounting treatment of goodwill?
A)Goodwill is recorded as an asset and amortized over 5 years regardless of any change in value.
B)Goodwill is recorded as an asset and is not written off as an expense unless its value decreases.
C)Goodwill is recorded as an asset and amortized over 40 years unless its value decreases.
D)Goodwill is expensed immediately in the year of purchase.

Question

Quizplus · Accepted Answer

Because goodwill does not have an identifiable useful life, it is not amortized, but is tested for impairment.

Which of the Following Statements Is Correct Regarding Accounting Treatment