How must Goodwill resulting from business combinations be treated under U.S.GAAP?
A)It must be amortized over a period of no more than 40 years.
B)It must be expensed when it is acquired.
C)It must be written down when its fair value is less than its carrying value.
D)It must be written down in no less than 5 years and no more than 40 years.

Question

Quizplus · Accepted Answer

Goodwill resulting from business combinations must be tested for impairment at least annually. If the fair value of the reporting unit is less than its carrying value, an impairment loss must be recognized for the amount by which the carrying value exceeds its fair value. There is no requirement to amortize goodwill under U.S. GAAP.

How Must Goodwill Resulting from Business Combinations Be Treated Under