Goodwill should be written off

Question

Quizplus · Accepted Answer

Goodwill should be written off when there is evidence that its carrying value has been impaired. Impairment occurs when the value of goodwill has decreased in value and can no longer be justified by the cash flows it generates. In accordance with the Generally Accepted Accounting Principles (GAAP), a company must assess its goodwill for impairment at least once every fiscal year, or more frequently if events or changes in circumstances suggest that it may be impaired. The impairment loss is recognized in the income statement as an expense. Therefore, option B is the best choice.

Goodwill Should Be Written Off