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QUESTION

QUESTION 10 / 11 An asset is classified as goodwill on the balance sheet when a company purchases an asset at greater than fair-market value. According to GAAP, you can adjust goodwill when___________

QUESTION 10 / 11

An asset is classified as goodwill on the balance sheet when a company purchases an asset at greater than fair-market value. According to GAAP, you can adjust goodwill when____________.

SELECT ONLY ONE:

  • an asset is sold;
  • stock prices go down:
  • a new asset is purchased:
  • stock prices go up:
  • goodwill is impaired.
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ANSWER

According to GAAP, you can adjust goodwill when goodwill is impaired.

Goodwill is not subject to annual amortization. Goodwill is tested for impairment periodically and decline in value of Goodwill is recognized as Impairment loss

Option E goodwill is impaired is correct

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