According to accounting standards, the costs of intangible assets with an indefinite life, such as goodwill, should:
A) not be amortized, but should be reviewed annually for impairment.
B) be reported on the statement of retained earnings in the year in which it is acquired.
C) be amortized over a reasonable period of time not to exceed 40 years.
D) be debited to an expense account entirely in the year in which acquired.

Question

Quizplus · Accepted Answer

According to accounting standards, the costs of intangible assets with an indefinite life, such as goodwill, should not be amortized but should be reviewed annually for impairment. This is because these assets are not expected to have a definite useful life and, therefore, cannot be amortized over a period of time. Instead, their value should be evaluated on an annual basis to determine if any impairment has occurred, meaning their value has declined. If there is impairment, the asset's carrying value should be adjusted accordingly.

According to Accounting Standards, the Costs of Intangible Assets with an Indefinite