The Treatment of Internally Generated Goodwill Varies from Purchased Goodwill

question 4

Multiple Choice

The treatment of internally generated goodwill varies from purchased goodwill under AASB 138 in that:

• A) Purchased goodwill is not amortised whereas internally generated goodwill is assumed to be maintained indefinitely.
• B) Purchased goodwill may be recorded as an asset, whereas internally generated goodwill may not.
• C) Internally generated goodwill is to be amortised over a period of no greater than 20 years, whereas purchased goodwill may not be recorded.
• D) Purchased goodwill is to be expensed in the period it is bought whereas internally generated goodwill is to be deferred and amortised over a period of no less than 20 years.
• E) None of the given answers.

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