Through 50 years of high quality service, Domo Diagnostics Laboratory has create

Question

Through 50 years of high quality service, Domo Diagnostics Laboratory has created goodwill with its clients that management estimates is worth at least $20,000,000.  Under IAS 38, how should this be recognized? Answer                      

                            
           An intangible asset "Goodwill" should be debited for $20,000,000.                             
           The $20,000,000 should be expensed over a period of 20 years.                             
           The $20,000,000 should be expensed over a period of 50 years.                             
           It should not be recognized in Domo's accounting records at all.

Explanation / Answer

An intangible asset "Goodwill" should be debited for $20,000,000.

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