Which of the following statements regarding goodwill is not true?
A)Goodwill is never amortized for financial reporting purposes.
B)A company must review its goodwill for impairment annually.
C)A company must review its goodwill for impairment whenever events or changes in circumstances occur that would more likely than not reduce the fair value below its carrying value.
D)A company records goodwill at the time that it acquires another company or at the time it determines that material intellectual capital exists in its employees.

Question

Quizplus · Accepted Answer

Goodwill is recorded on a company's balance sheet as a result of acquiring another company for more than the fair value of its net identifiable assets. It is not recorded due to the recognition of internal intellectual capital or the value of its employees.

Which of the Following Statements Regarding Goodwill Is Not True