Goodwill should properly appear on the financial statements of a company which:

Question

Quizplus · Accepted Answer

Goodwill should appear on the financial statements of a company that has purchased an entity and has not yet fully amortized the goodwill. Goodwill represents the excess amount paid for an acquired entity over the fair value of its identifiable assets and liabilities. The excess amount is recorded as goodwill and is amortized over its useful life, up to a maximum of 20 years. Therefore, until goodwill is fully amortized, it should be reported on the company's financial statements. Choices B, C, and D are not relevant to the determination of whether goodwill should be reported on the financial statements.

Goodwill Should Properly Appear on the Financial Statements of a Company