Goodwill is the excess value of a business as a whole, over the sum of the fair values of all its identifiable net assets. It is recorded by the acquirer of a business in a business acquisition, not by the seller. Goodwill created internally is not recognized as an asset. It cannot be amortized; instead it must be tested for impairment at least annually.

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Goodwill Is

Question 31

Multiple Choice

Goodwill is:

A) Amortized over the greater of its estimated life or forty years.
B) Only recorded by the seller of a business.
C) The excess of the fair value of a business as a whole over the fair value of all net identifiable assets.
D) Recorded when created internally through advertising expense.

Correct Answer: