Response to the following questions:
(a) How would you define goodwill?
(b) Three possible accounting treatments of goodwill are:
(i) retain goodwill as an asset to be amortized over its estimated useful life;
(ii) retain goodwill as an asset indefinitely, subjecting it to annual impairment tests;
(iii) write off goodwill to reserves at the time of acquisition.
Discuss briefly the principles underlying each of these three approaches. Indicate your preferences.