Question

Which of the following statements regarding goodwill is false? Select one: a. Goodwill is never amortized for financial reporting purposes. O b. A company must review its goodwill for impairment annually O C. A company records goodwill at the time that it acquires another company or at the time it determines that material intellectual capital exists in its employees. Od. A company must review its goodwill for impairment whenever events or changes in circumstances occur that would more likely than not reduce the fair value below its carrying value.

Answer 1

Ans is C

A company records goodwill at the time that it acquires another company or at the time it determines that material intellectual capital exists in its employees.

Reason:-

Choice A is correct because goodwill is not amortized for financial reporting purposes.

Choice B is correct because goodwill value is reviewed yearly.

Choice D is correct because goodwill is reviewed for its valuation whenever any event or circumstance occurs which makes fair value less than carrying amount.

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