Question

Short Corporation acquired Hathaway, Inc., for $33,520,000. The fair value of all Hathaway's identifiable tangible and intangible assets was $30,000,000. Short will amortize any goodwill over the maximum number of years allowed. What is the annual amortization of goodwill for this acquisition?

Answer 1

Answer:

$0

Explanation:

The computation of the annual amortization for goodwill is shown below:

As we know in the case of goodwill, the impairment test is to be done on periodic basis and if there is any fall in the value so the same is to be reported as the impairment loss

So for goodwill, no amortization is to be done

hence, the annual amortization is zero