Misconception · MIS:private-company-alternative-is-automatic

Mistaken idea “The private-company goodwill alternative is automatic”

Mistaken reasoning: This mistake amortizes goodwill or subsumes identifiable intangibles whenever the entity is privately owned, without eligibility and election evidence.

Updated Aug 21, 2026 Review due Nov 8, 2026

Why this is mistaken

Require a scope-and-election header. If it is absent, retain the core model and request evidence rather than silently selecting the shorter alternative.

Where to watch

When this mistake may appear

  • A privately held company reports goodwill or completes a business combination.
Check your work

Your work may contain this mistake if:

  • The answer begins a ten-year amortization schedule without an election memo.