According to GAAP Regarding Amortization of Goodwill and Other Intangible

question 89

Multiple Choice

According to GAAP regarding amortization of goodwill and other intangible assets, which of the following statements is true?

• A) Goodwill recognized in consolidation must be amortized over 20 years.
• B) Goodwill recognized in consolidation must be expensed in the period of acquisition.
• C) Goodwill recognized in consolidation will not be amortized but subject to an annual test for impairment.
• D) Goodwill recognized in consolidation can never be written off.
• E) Goodwill recognized in consolidation must be amortized over 40 years.

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Definitions:

Expansion Phase

A period in the business cycle during which the economy grows and unemployment decreases.

World War II

A global conflict that lasted from 1939 to 1945, involving most of the world's nations, including all of the great powers, organized into two opposing military alliances: the Allies and the Axis.

Recessions

Instances of provisional economic weakness where both trading and industrial activities fall off, universally determined by a two-quarter continuous drop in GDP.

General Merchandise

A category of goods that includes a wide range of products from apparel to home goods sold by retailers.