Question
Yeast Corporation purchased Bitter Ltd. on August 31, 2017. Yeast Corporation recorded goodwill in the purchase of Bitter. Yeast has determined that the Bitter goodwill
Yeast Corporation purchased Bitter Ltd. on August 31, 2017. Yeast Corporation recorded goodwill in the purchase of Bitter. Yeast has determined that the Bitter goodwill will have an indefinite life. How will Yeast account for the Bitter goodwill in future accounting periods?
A) Yeast will amortize the Bitter goodwill over a 50-year life.
B) If the value of the Bitter goodwill increases in subsequent years, Yeast will increase the value in the Bitter Goodwill account.
C) If the value of the Bitter goodwill decreases in subsequent years, Yeast will decrease the value in the Bitter Goodwill account.
D) Yeast is not allowed to change the value of the Bitter Goodwill account regardless of any future increase or decrease in the value of Bitter Goodwill.
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