For Financial Statement Purposes, Goodwill Created by an Acquisition

Multiple Choice

For financial statement purposes, goodwill created by an acquisition:

A) must be amortized on a straight-line basis over 10 years.
B) must be reviewed each year and amortized to the extent that it has lost value.
C) is expensed evenly over a 20-year period.
D) never affects the profits of the acquiring firm.
E) is recorded in an amount equal to the fair market value of the assets of the target firm.