Goodwill may be
A) capitalized only when purchased.
B) capitalized either when purchased or created internally.
C) capitalized only when created internally.
D) written off directly to retained earnings.

Question

Quizplus · Accepted Answer

Goodwill is recognized and capitalized on the balance sheet only when it is purchased, such as in an acquisition of another company. Internally generated goodwill is not capitalized due to the difficulty in measuring its value reliably.

Goodwill May Be