For consolidated tax return purposes, purchased goodwill is amortized as a deduction to taxable income over 15 years. Under financial accounting rules, 40-year amortization is allowed.

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For financial accounting purposes, goodwill is not amortized but is instead tested annually for impairment. The 40-year amortization period applies to some intangible assets under previous accounting standards, but current standards do not allow for the amortization of goodwill.

For Consolidated Tax Return Purposes, Purchased Goodwill Is Amortized as a Deduction