📏CPA EXAM PREP

Goodwill and Indefinite-Lived Intangible

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Question

What does a bargain purchase indicate in a business combination?

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Answer

A gain recognized immediately in income.

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Question

How is an indefinite-lived intangible like a trademark tested for impairment?

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Answer

Compare carrying amount to fair value; recognize the excess.

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Question

What happens if an indefinite-lived intangible becomes finite-lived?

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Answer

Begin amortizing it prospectively over the remaining life.

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Question

How is goodwill initially measured in a business combination?

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Answer

Consideration transferred plus NCI plus prior interest, less net assets acquired.

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