Question

The costs associated with purchased goodwill are capitalized and amortized over a period not to exceed...

The costs associated with purchased goodwill are capitalized and amortized over a period not to exceed 20 years.

True or False?

Homework Answers

Answer #1

Solution:

Goodwill is no longer permitted to be amortized if purchased. In accounting goodwill is accrued when pays more for an assets from its fair value. Corporations use the purchase method of accounting, which do not allow impairement of goodwill. Goodwill is carried in balance sheet and tested for impairment at least once a year.

Hence costs associated with purchased goodwill are capitalized and amortized over a period not to exceed 20 years. This statement is false.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Research costs incurred by a company should​ be: A. capitalized and amortized over 20 years or...
Research costs incurred by a company should​ be: A. capitalized and amortized over 20 years or less B. expensed on the current​ year's income statement C. capitalized and amortized over a period greater than 25 years D. either capitalized and amortized or expensed immediately at the option of the accountant
As long as sales revenues exceed all costs over part of an accounting period, a firm...
As long as sales revenues exceed all costs over part of an accounting period, a firm will avoid any cash shortage. true or false
38. Research and development costs are A) treated as an expense when incurred. B) capitalized but...
38. Research and development costs are A) treated as an expense when incurred. B) capitalized but not amortized. C) capitalized and amortized over the periods that will probably benefit from the research and development. D) included with the cost of the patent resulting from the research and development. 39. All of the following are intangible assets except A) Patents B) Goodwill C) Franchises D) Accounts Receivable 40. Which of the following below is an example of a capital expenditure? A)...
5. Capitalized costs incurred to develop software for internal use is amortized using which method of...
5. Capitalized costs incurred to develop software for internal use is amortized using which method of amortization? a) Which ASC answers this question? b) Which amortization method is recommended?
When SB Corporation purchased Banner Corporation in the current year, SB recorded $1,500,000 of goodwill. How...
When SB Corporation purchased Banner Corporation in the current year, SB recorded $1,500,000 of goodwill. How should SB account for the goodwill after the acquisition? The goodwill should be amortized straight-line over its estimated useful life. The value of the goodwill should be increased each year by the amount of net income earned by Banner. The goodwill should be written down each year by the amount of net income earned by Banner. The goodwill should remain on SB’s books as...
Which of the following is true regarding costs to be capitalized in the acquisition stage? When...
Which of the following is true regarding costs to be capitalized in the acquisition stage? When land with an old building is purchased as a future building site, the cost of removing the old building is part of the cost of the new building. Insurance on equipment purchased, while the equipment is in transit, is part of the cost of the equipment. Most research and development costs are capitalized Both land and land improvement are depreciable
An office property was initially purchased for $14 million. When purchased, the additional costs associated of...
An office property was initially purchased for $14 million. When purchased, the additional costs associated of initially acquiring the property were $200,000. The accumulated depreciation charged over the holding period has totaled $600,000. Recently, capital improvements of $1.3 million to the property have been incurred. Determine the property’s current adjusted basis. 14.9 million 14.2 million 12.9 million 13.6 million
QUESTION 20 Flotation costs are expenses associated with the sale of a newly created security. true...
QUESTION 20 Flotation costs are expenses associated with the sale of a newly created security. true false
You   just   borrowed   $200,000   to   buy   a   house   amortized   over   a   period   of   25   years. &nb
You   just   borrowed   $200,000   to   buy   a   house   amortized   over   a   period   of   25   years.   You   signed   a   5-year   mortgage   deal   with   your   bank   at   a   rate   of   0.75%   effective   monthly   rate.   Your   monthly   payment   comes   out   to   $1,678.39.   How   much   of   your   20th payment   will   go   towards   payment   of   interest?   a) $1,427.25 b) $1,470.28 c) $1,471.25 d) $1,472.79 e) $1,473.67
true or false 1.) Goodwill is recorded only when the purchase price exceeds the market value...
true or false 1.) Goodwill is recorded only when the purchase price exceeds the market value of the net liabilities in the acquisition of another company. 1.a) Most intangible assets have a residual value. 1.b) Adoption of IFRS by U.S. companies is expected to result in the recognition of less intangible assets on their balance sheets than presently exist. 1.c) Patents are state government grants that give the holder the exclusive right to produce and sell an invention for 20...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT