Goodwill is: Multiple Choice Amortized over the greater of its estimated life or 40 years. The excess of the fair value of a bus

Question

3 years ago

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Goodwill is: Multiple Choice Amortized over the greater of its estimated life or 40 years. The excess of the fair value of a bus

iness over the fair value of all net identifiable assets. None of these answer choices are correct. Only recorded by the seller of a business.

Business

1 answer:

Svet_ta [14] · Answer 1 · 2022-02-17T05:25:35+03:00

Answer:

Goodwill is:

The excess of the fair value of a business over the fair value of all net identifiable assets.

Explanation:

This definition of Goodwill implies that it is usually acquired by the purchaser of another business, when it pays a price higher than the fair market value of the other company's net assets. It is not a physical asset like property, plant, and equipment, but intangible.

Goodwill arises from a company's good reputation, loyal customers or clientele base, brand identity, talented workforce, and proprietary technology.

Goodwill does not have a definite life and under US GAAP and IFRS standards. Therefore, it is not amortized like other intangible assets but is evaluated for impairment every year.