Using the purchase accounting method to report mergers,goodwill is not amortized; rather,it is subject to an annual impairment test.

Purchase Accounting Method

A set of accounting techniques used to assess the acquisitions of assets, liabilities, and non-controlling interests of a company.

Goodwill

An intangible asset that arises when a business is acquired for more than the sum of the fair value of its identifiable net assets.

Annual Impairment Test

A review conducted yearly to determine if an asset's carrying value exceeds its recoverable amount, leading to an adjustment if necessary.