Using the purchase accounting method to report mergers,goodwill is not amortized; rather,it is subject to an annual impairment test.

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Under the purchase accounting method, goodwill is no longer amortized but is subject to an annual impairment test. This means that the value of goodwill is periodically reviewed to ensure that it is still worth its original purchase price. If an impairment is identified, the goodwill value is reduced accordingly on the balance sheet.

Using the Purchase Accounting Method to Report Mergers,goodwill Is Not