How is goodwill accounted for subsequent to acquisition?

A) It should be written off as soon as possible against retained earnings.
B) It should not be amortized because it has an indefinite life.
C) It should be written off as soon as possible as an expense.
D) It is amortized over its estimated useful life.

Goodwill

An intangible asset that arises when one company acquires another for a premium value, representing the excess of the purchase price over the fair market value of the identifiable assets and liabilities.

Indefinite Life

An intangible asset's useful life that is not limited to a predetermined period and could extend indefinitely.

Amortized

The process of spreading out a loan or intangible asset into a series of fixed payments over time, reducing the value of the asset or paying off the debt.