Question
At some point in your career, you grow tired of working with investment firms and decide to instead move into the tech sector. The move
At some point in your career, you grow tired of working with investment firms and decide to instead move into the tech sector. The move was appealing for a variety of reasons but required you to relearn a great deal many things related to unique situations that technology firms find themselves in. One surprise you had was how many intangible assets the company has on its books. In particular, the amount of goodwill was astounding. You remembered the basics of the accounting for Goodwill from your time studying for the CPA exam but you wanted to refresh your knowledge of it. Upon doing so, you discovered that the accounting seemed to be not necessarily consistent with some of the theory for accounting for other long-term assets. You reflect on whether this accounting is effective.
Discuss the accounting for Goodwill under US GAAP. Does it fit within the theoretical framework created by the Concepts Statements? How could the accounting for goodwill be improved?
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