Goodwill

(Question)
Regarding the goodwill on the acquisition of Target (from 80% to 100%) being considered by Acquirer, which of the following statements is correct?

A. It is equal to the excess of the purchase price over the fair value of the identifiable assets and liabilities and must be amortized over no longer than 30 years.
B. It will be reported as an asset, not amortized, and must be reviewed for impairment at least annually, with same test for impairment under IFRS and U.S. GAAP.
C. For goodwill that is found to be impaired, the amount of the impairment charge reported is the same under both IFRS and U.S. GAAP.

---

Answer: C

• Goodwill is no longer amortized under IFRS or U.S. GAAP.
• The test for impairment is different under IFRS than under U.S. GAAP.
• For assets that are judged to be impaired, the calculation of the amount of the impairment charge is the same under both IFRS and U.S. GAAP.