IFRS prohibits systematic amortization of goodwill, instead the need for impairment must be tested at least once a year. In consolidated accounts prepared in accordance with K3, on the other hand, goodwill must be amortized systematically over the useful life, normally not over a period longer than five years.

Discuss how these two models for accrual of group goodwill take into account the following:

Acquisitions are associated with risk

Internally generated goodwill may not be reported as an asset