a. How would you define goodwill? b. Three possible accounting treatments of goodwill are: i. retain goodwill

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a. How would you define goodwill?

b. Three possible accounting treatments of goodwill are:
i. retain goodwill as an asset to be amortized over its estimated useful life;
ii. retain goodwill as an asset indefinitely, subjecting it to annual impairment tests;
iii. write off goodwill to reserves at the time of acquisition.
Discuss briefly the principles underlying each of these three approaches. Indicate your preferences.

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