For Financial Statement Purposes, Goodwill Created by an Acquisition

question 77

Multiple Choice

For financial statement purposes, goodwill created by an acquisition:

• A) must be amortized on a straight-line basis over 10 years.
• B) must be reviewed each year and amortized to the extent that it has lost value.
• C) is expensed evenly over a 20-year period.
• D) never affects the profits of the acquiring firm.
• E) is recorded in an amount equal to the fair market value of the assets of the target firm.

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