Goodwill is an intangible asset that firms report on their respective balance sheet as a result of acquiring other firms. Goodwill has an indefinite life and should not be amortized. It should however be tested for impairment whenever the firms’ financial statements are used for public or are submitted for external financing. In a two-page analysis, 1). Describe the procedures prescribed by both USGAAP and IFRS to test for goodwill impairment and,2). How do these procedures differ from the procedure followed for testing the impairment of a fixed asset or an intangible asset that has a finite life.
Goodwill is an intangible asset that firms report on their respective balance sheet as a result of acquiring other firms. Goodwill has an indefinite life and should not be amortized. It should however be tested for impairment whenever the firms’ financial statements are used for public or are submitted for external financing. In a two-page analysis, 1). Describe the procedures prescribed by both USGAAP and IFRS to test for goodwill impairment and,2). How do these procedures differ from the procedure followed for testing the impairment of a fixed asset or an intangible asset that has a finite life.
Goodwill is an intangible asset that firms report on their respective balance sheet as a result of acquiring other firms. Goodwill has an indefinite life and should not be amortized. It should however be tested for impairment whenever the firms’ financial statements are used for public or are submitted for external financing. In a two-page analysis, 1). Describe the procedures prescribed by both USGAAP and IFRS to test for goodwill impairment and,2). How do these procedures differ from the procedure followed for testing the impairment of a fixed asset or an intangible asset that has a finite life.
Goodwill is an intangible asset that firms report on their respective balance sheet as a result of acquiring other firms. Goodwill has an indefinite life and should not be amortized. It should however be tested for impairment whenever the firms’ financial statements are used for public or are submitted for external financing. In a two-page analysis, 1). Describe the procedures prescribed by both USGAAP and IFRS to test for goodwill impairment and, 2). How do these procedures differ from the procedure followed for testing the impairment of a fixed asset or an intangible asset that has a finite life.
Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).
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