Which of the following is correct?
A) The fair value of internally generated intangible assets should be estimated and recorded on the books of the entity that developed the assets even in the absence of a business acquisition.
B) The fair value of internally generated intangible assets may be estimated but should not be recorded on the books or displayed on the financial statements of the entity.
C) Managers may value their own companies and recognize goodwill in the company accounts even though an entity has not been acquired in a business acquisition.
D) Goodwill should be recognized in the accounts whenever the value of the firm increases based on current market prices of the firm's common stock.

Question

Quizplus · Accepted Answer

Internally generated intangible assets may be estimated for internal management purposes but are not recorded at fair value on the financial statements due to the difficulty in reliably measuring their fair value without an external transaction. Goodwill is only recognized in a business combination and cannot be internally generated or recognized based on stock price movements.

Which of the Following Is Correct