When goodwill in an associate is acquired by an investor, the amortisation of goodwill is:
A) spread evenly across the useful life of the investment.
B) not permitted.
C) included in the determination of the investor's share of the associate's profit or loss.
D) included in the revaluation of the investment.

Question

Quizplus · Accepted Answer

Goodwill on the acquisition of an associate is not amortized. Instead, it is tested for impairment at least annually. The International Financial Reporting Standards (IFRS) prohibit the amortization of goodwill, favoring impairment tests to ensure the asset's value is not overstated on the balance sheet.

When Goodwill in an Associate Is Acquired by an Investor