International standards require that goodwill:
A)Be capitalized and amortized over 20 years or less.
B)Be capitalized and amortized over 40 years or less.
C)Be capitalized and reviewed annually and its value should be adjusted if impaired.
D)Be expensed immediately.

Question

Quizplus · Accepted Answer

International standards require that goodwill should be capitalized and reviewed annually, and its value should be adjusted if impaired. Goodwill cannot be amortized over a fixed period like other intangible assets because it has an indefinite life. Instead, it is subject to annual impairment testing to determine if its value has been impaired. Therefore, option C is correct. Option A and B are incorrect because goodwill cannot be amortized over a fixed period. Option D is also incorrect because goodwill cannot be expensed immediately.

International Standards Require That Goodwill