🎓CFA Final Prep All Topics

Intangible Assets and Goodwill

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Question

How is goodwill calculated in a business combination?

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Answer

Purchase price minus fair value of identifiable net assets.

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Question

Under IFRS, what comparison determines whether a long-lived asset is impaired?

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Answer

Carrying amount versus recoverable amount.

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Question

How are finite-life and indefinite-life intangible assets treated after recognition?

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Answer

Finite-life intangibles are amortized; indefinite-life intangibles are not.

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Question

Why are trademarks and goodwill typically not amortized?

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Answer

They are treated as indefinite-life intangibles.

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