Purchased goodwill should
A) be written off as soon as possible against retained earnings.
B) be written off as soon as possible as an other expense item.
C) be written off by systematic charges as a regular operating expense over the period benefited.
D) not be amortized.

Question

Quizplus · Accepted Answer

Purchased goodwill is not amortized under current accounting standards (e.g., IFRS and US GAAP). Instead, it is subject to an annual impairment test to determine if its carrying value exceeds its recoverable amount, and any impairment loss is recognized in the income statement.

Purchased Goodwill Should