Through 50 Years of High Quality Service, Domo Diagnostics Laboratory

question 27

Multiple Choice

Through 50 years of high quality service, Domo Diagnostics Laboratory has created goodwill with its clients that management estimates is worth at least $20,000,000. Under IAS 38, how should this be recognized?

• A) An intangible asset "Goodwill" should be debited for $20,000,000.
• B) The $20,000,000 should be expensed over a period of 20 years.
• C) The $20,000,000 should be expensed over a period of 50 years.
• D) It should not be recognized in Domo's accounting records at all.

---

Definitions:

Concurrent Property Ownership

Refers to a situation where two or more parties hold ownership rights in a single piece of property simultaneously.

Cooperative

An organization owned and operated by a group of individuals for their mutual benefit.

Fee Simple Absolute

The most complete form of property ownership, giving the owner total control and rights to the property.

Condominium

A condominium is a type of property ownership where individual units in a larger complex are owned independently while common areas are held jointly by the unit owners.