For each question, (1) provide the citation number (topic and subtopic) that addresses the question and (2) answer the question. Document this under the question, indenting your answer or otherwise indicating it is the answer (bold, underline, different color, etc.)

1. Goodwill

King Company is contemplating the purchase of a smaller company, which is a distributor of King's products. Top management of King is convinced that the acquisition will result in significant synergies in its selling and distribution functions. You audit senior asked you to document the effects of the acquisition on the combined company's financial statements.

(a) Identify the primary authoritative guidance that addresses goodwill and other intangible assets.

(b) Define goodwill.

(c) Is goodwill subject to amortization? If not, would it ever be reflected in the income statement? Explain.

(d) When goodwill is recognized for a subsidiary, how should it be reviewed or tested for impairment?