Question

Which​ statement(s) below is​ TRUE?

A. Goodwill cannot decrease on balance sheet from one year to the next.


B. Goodwill is the same term often used for intangibles.


C. Intangibles increase when treasury stock increases.


D. FASB Rule 16 requires companies to admit once a year whether the premiums they paid for​ acquisitions, called​ goodwill, were a waste of money.


E. Seeing Goodwill regularly increasing on a balance sheet is not a good thing.

Answer 1

E) Seeing Goodwill regularly increasing on a balance sheet is not a good thing.

Step-by-step explanation:

Generally US GAAP requires that goodwill is tested annually in order to determine if it must decrease or not. Companies must verify if impairment losses must be reported or assets must be written down.

Goodwill cannot be amortized, but it can decrease (and generally does) from year to year, so seeing it increase is not a good thing.