Question

During the past two years, through extensive advertising and improved customer relations, Orange Corporation estimated that it had developed customer goodwill worth $500,000. For the current year, determine the amount of goodwill Orange may amortize.

Answer 1

Answer:

$0

Explanation:

During the past two years, through extensive advertising and improved customer relations, Orange Corporation estimated that it had developed customer goodwill worth $500,000. For the current year, determine the amount of goodwill Orange may amortize.

Self created goodwill is not a 197 intangible and thus cannot be amortized.

Intangible property are property acquired for use in a trade or business or for the production of income  be amortized over fifteen years from the date of acquisition regardless of the assets useful life, good will is an example of intangible property.However,self created goodwill cannot be amortize for example customer list that you developed over the years for your own business can not be amortize.