Acquired goodwill is considered to be a section 197 asset amortized over 15 years for tax purposes.-----True
Goodwill purchased:When a company acquires another company as a going concern and pays the value of the latter including all of its assets and excluding outstanding liabilities, it is declared as acquired goodwill.
Goodwill is a balance sheet adjusting item that explains why the cash spent to acquire the business is greater than the assets received in return. First, subtract liabilities from identifiable assets such as inventory and real estate to determine the value of identifiable net worth.
When a company is acquired, goodwill is recognized as an intangible asset with an indefinite useful life and tested for impairment.
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