Goodwill of $20,000 was recorded upon the purchase of Smith Repair Parts. The company has been very successful and has increased in value during its first year of operation under its new management. How much amortization should be recorded for the first year?

Question

Quizplus · Accepted Answer

Goodwill is not amortized under U.S. GAAP. Instead, it is tested annually for impairment. Since the question does not mention any impairment, no amortization expense should be recorded.

Goodwill of $20,000 Was Recorded Upon the Purchase of Smith