Calculating Admitted Assets - Goodwill
If the Goodwill on acquisitions occurring less than 10 years ago were given, would we include that in the calculation of admitted assets?
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If the Goodwill on acquisitions occurring less than 10 years ago were given, would we include that in the calculation of admitted assets?
Comments
10 years is the threshold used for the amortization of goodwill into unrealized capital gains, in SAP. It is not relevant for GAAP, although GAAP evaluates goodwill for impairments on a regular basis.
In the question from Fall 2014, question 15. If the goodwill amount did not specify it was goodwill on acquisitions occurring 10+ years ago, would we have included it in the calculation of assets? What if it said on acquisitions occurring within the past 10 years? Would goodwill be included in the calculation?
In this question, for example, SAP admitted asset amount is needed. Goodwill would not be in this amount whether the acquisition was more or less than 10 years ago, because more than 10 years ago is not considered an asset, and less than 10 years ago will be amortized into unrealized capital gain, which is a non-admitted asset.
Had the question asked for GAAP surplus, goodwill would be included in the assets, no matter how old, along with adjustment for impairments.