Purchased goodwill should
A) be written off as soon as possible against retained earnings.
B) be written off as soon as possible as an extraordinary 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 should not be amortized according to the accounting standards like IFRS and US GAAP. Instead, it is tested annually for impairment, where its carrying value on the balance sheet is compared to its recoverable amount, and any impairment loss is recognized if the carrying value exceeds the recoverable amount.

Purchased Goodwill Should