which of the following statements is correct regarding accounting treatment of goodwill? multiple choice…

which of the following statements is correct regarding accounting treatment of goodwill? multiple choice goodwill is recorded as an asset and amortized over 5 years regardless of any change in value. goodwill is recorded as an asset and is not written off as an expense unless its fair value is less than its book value. goodwill is expensed immediately in the year acquired. goodwill is recorded as an asset and amortized over 40 years unless its fair value decreases.

which of the following statements is correct regarding accounting treatment of goodwill? multiple choice goodwill is recorded as an asset and amortized over 5 years regardless of any change in value. goodwill is recorded as an asset and is not written off as an expense unless its fair value is less than its book value. goodwill is expensed immediately in the year acquired. goodwill is recorded as an asset and amortized over 40 years unless its fair value decreases.

Answer

Brief Explanations:

Under accounting standards, goodwill is recorded as an asset. It is not amortized annually like some other intangible - assets. Instead, it is tested for impairment at least annually. If the fair value of the reporting unit is less than its book value, an impairment loss is recognized, meaning it is written off as an expense.

Answer:

Goodwill is recorded as an asset and is not written off as an expense unless its fair value is less than its book value.