Final answer:
The statement is incorrect under past accounting standards but current standards require annual impairment tests instead of amortization for goodwill. Goodwill is an intangible asset recognized during business acquisitions and it must be tested annually for impairment as per FASB ASC 350.
Step-by-step explanation:
The statement that goodwill associated with the acquisition of a business cannot be amortized is incorrect under previous accounting standards. However, under current accounting standards, goodwill is no longer amortized. Instead, it is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired.
Goodwill is an intangible asset that arises when a company acquires another business for more than the fair value of its identifiable tangible and intangible assets and liabilities. Under the Financial Accounting Standards Board (FASB) ASC 350, Intangibles - Goodwill and Other, companies must perform an annual impairment test to determine if the carrying value of goodwill is supported by the fair value of the reporting unit.