When Goodwill Is Acquired by an Investor in an Associate,the

question 25

Multiple Choice

When goodwill is acquired by an investor in an associate,the amortisation of goodwill is:

• A)spread evenly across the useful life of the investment;
• B)not permitted;
• C)included in the determination of the investor's share of the associate's profit or loss;
• D)included in the revaluation of the investment.

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Definitions:

Profits

The financial gain realized when the revenue earned from business activities exceeds the expenses, costs, and taxes needed to sustain those activities.

Output

The quantity of goods or services produced by a business, industry, or economy within a specific period.

Shutting Down

A short-run decision by a firm to cease production temporarily due to unfavorable market conditions.

Long Run

A period in economics where all factors of production and costs are variable, allowing for full adjustment to changes.