How is goodwill accounted for subsequent to acquisition?
A)It should be written off as soon as possible against retained earnings.
B)It should not be amortized because it has an indefinite life.
C)It should be written off as soon as possible as an expense.
D)It is amortized over its estimated useful life.

Question

Quizplus · Accepted Answer

Goodwill is not amortized because it is considered to have an indefinite life. Instead, it is tested annually for impairment. If the carrying amount of goodwill exceeds its fair value, an impairment loss is recognized.

How Is Goodwill Accounted for Subsequent to Acquisition