Short corporation acquired hathaway, inc., for $52,000,000. the fair value of all hathaway's identifiable tangible and intangible assets was $48,000,000. short will amortize any goodwill over the maximum number of years allowed. what is the annual amortization of goodwill for this acquisition? $0. $100,000. $400,000. $200,000.


Goodwill is not amortized


In 2001, According to the Financial Accounting Standards Board (FASB) declared in Statement 142, Accounting for Goodwill and Intangible Assets, that goodwill was no longer permitted to be amortized.

correct option is a $0


given data

Acquisition value = $52,000,000

Fair value assets = $48,000,000

to find out

What is the annual amortization of goodwill for this acquisition


we know that annual amortization of goodwill on a straight line basis over 40 years before 2001

and  FASB also issue statement about that it does not allow automatic amortization of goodwill

so it will be zero here as goodwill is not amortized here

so correct option is correct option is a $0

Do you know the answer?

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