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Does GAAP require amortization of goodwill against net income? If not, when does goodwill decrease? A.Maybe, under IFRS goodwill is written off or reduced to a lesser value only when its value is impaired. Under US GAAP, goodwill is amortized. B.Yes, goodwill is always amortized against net income over the estimated useful life of the goodwill. C.No, under both the U.S. GAAP and IFRS goodwill is written off or reduced to a lesser value only when its value is impaired. D.Maybe, if goodwill is purchased, it should be amortized over the estimated useful life of the goodwill, if goodwill is created then it should not be amortized.

ANSWER


As per GAAP, self generated intangible assets cannot be recognised whereas acquired intangible assets can be recognised and amortized over its useful life.

Hence we can say that self generated goodwill cannot be amortized and acquired godwill can be amortized.
Correct Option is 
D) May be, if goodwill is ourchased, it should be amortized over the estimated useful life of the goodwill, if good will is ccreated then it should not be amortized.

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