Which of the following is an example of an intangible with an indefinite life?
A)a copyright on a song
B)a patent on a new technology
C)the development costs of a new drug
D)the goodwill value assigned to the excess purchase price when purchasing a company

Question

Quizplus · Accepted Answer

Goodwill value assigned to the excess purchase price when purchasing a company is an example of an intangible with an indefinite life. Goodwill is the excess of the purchase price over the fair value of net assets acquired in a business combination. It represents the value of the company's reputation, brand name, customer relationships, and other intangibles that are not separately identifiable. Goodwill is considered to have an indefinite life because it is not subject to amortization but is tested for impairment annually.

Which of the Following Is an Example of an Intangible