sla1

sla1

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      I can think of two potential issues:

      * The question is incomplete: What intangibles are “amortizable.” That would mean only those intangibles with “finite lives,” in this case, only the product patent. Goodwill used to be amortizable (now only checked for impairment). If my memory serves me correctly, it was also a 40-year life (i.e., amortizable) but now considered indefinite, thus not amortizable.

      * The fact set is trying to distract you on the M&A process: You don’t “acquire goodwill” per se. Any goodwill on the target’s balance sheet is removed, and “new goodwill is created” (if any) based on the purchase price in excess of the fair market value of net assets acquired, which is allocated to new goodwill after step-ups in other assets (e.g., PP&E, inventory, etc.).

      Best,

      Steve

      Zee Tan voted up
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      Goodwill is an intangible asset, but infinite life.

      Zee Tan voted up
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