According to IFRS 3,how Should Companies Account for Goodwill Arising

question 22

Multiple Choice

According to IFRS 3,how should companies account for Goodwill arising from business combinations?

• A)It is capitalized and amortized over a period of no more than 40 years.
• B)It is expensed in the year the subsidiary is acquired.
• C)It is capitalized and written down when its fair value become less than its carrying value.
• D)It is amortized over between 5 and 40 years.

---

Definitions:

Merchandising Company

A type of business that purchases goods in a ready-to-sell condition and earns income by selling these goods to end consumers.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including materials and labor.

Product Costs

Costs that are directly associated with the manufacture of goods, including materials, labor, and manufacturing overhead.

Financial Reporting

Financial reporting involves the disclosure of financial results and related information to various stakeholders about a company's financial health and performance.