How do you amortize goodwill?

Prior to 2001, the U.S. accounting rules required goodwill to be amortized to expense over a period not to exceed 40 years. However, in June 2001 the Financial Accounting Standards Board issued its Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets. This accounting pronouncement ended the automatic amortization of goodwill to expense for U.S. financial reporting.

While goodwill is no longer amortized to expense in uniform increments, goodwill is to be measured annually to determine if there is an impairment loss. (However beginning in 2015, private companies may opt to amortize goodwill generally over a 10-year period and thereby minimize the cost and complexity involved with testing for impairment.)

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