If goodwill has decreased in value, it is said to be:
A) worthless.
B) impaired.
C) amortized.
D) a capital expenditure.

Question

Quizplus · Accepted Answer

When goodwill has decreased in value, it is said to be impaired. Impairment of goodwill occurs when the value of the goodwill on the company's balance sheet exceeds its fair value. The impairment must be recognized on the income statement and the goodwill balance must be adjusted downward, which can result in a decrease in net income and overall shareholder equity.

If Goodwill Has Decreased in Value, It Is Said to Be