Identify the Incorrect Statement Regarding the Differences in the Treatment

question 99

Multiple Choice

Identify the incorrect statement regarding the differences in the treatment of goodwill across countries.

• A)When one company acquires another in a takeover,the value of the goodwill is calculated as the amount paid for a firm above its book value.
• B)Accounting rules in many countries allow acquiring firms to deduct the value of goodwill from the amount of equity or net worth reported on their balance sheet.
• C)Since 2001,the U.S.requires that goodwill associated with acquisitions has to be amortized against earnings.
• D)In the United States,until recently goodwill has had to be deducted from the profits of the acquiring firm over as much as 40 years.