...over from the old IASC | July 2001 | Project added to IASB agenda | 5 December 2002 | Exposure Draft Business Combinations and related exposure drafts proposing amendments to IAS 36 and IAS 38 | 31 March 2004 | IFRS 3 Business Combinations and related amended versions of IAS 36 and IAS 38 IFRS 3 supersedes IAS 22 | 1 April 2004 | Generally: Business combinations agreed to after 31 March 2004. Special provisions for previously recognised goodwill, negative goodwill, intangible assets, and equity accounted investments. | 29 April 2004 | Exposure Draft of Proposed Amendments to IFRS 3 Combinations by Contract Alone or Involving Mutual Entities. After considering comments on this ED, the Board decided to include the issues addressed in the ED in the 30 June 2005 exposure draft. | RELATED INTERPRETATIONS | * Issues Relating to This Standard that IFRIC Did Not Add to Its Agenda | AMENDMENTS UNDER CONSIDERATION BY IASB | 30 June 2005 | Exposure Draft of substantial revisions to IFRS 3 | SUMMARY OF IFRS 3 | | Deloitte has published an 84-page book Business Combinations: A Guide to IFRS 3. The guide: * Outlines the key features of IFRS 3. * Provides illustrative examples to assist in applying the standard. * Discusses the requirements of IAS 36 Impairment of Assets and IAS 38 Intangible Assets as they relate to business combinations. * Includes guidance on determining fair value for the purposes of accounting for business combinations; an overview...
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...long-lived assets and implications associated with Johnson and Johnson’s accounting methods. In this memo we would like to cover five main topics: long-lived assets, depreciation and amortization, J&J policies regarding intangible assets, cash flow statements, and asset turnover/ return on assets. In 2013, J&J reported three different types of long-lived assets on their Consolidated Balance Sheet. The first kind reported was Plant, Property, and Equipment. The second one was Intangible Assets and third was Goodwill. We will be investigating these three assets in further detail. J&J reported $16,710 million net worth of PP&E. Within this major asset category are many sub accounts: Land & Improvements, Building & Building Equipment, and Construction in Progress, Machine & Equipment, and Depreciation. Johnson & Johnson uses the straight-line depreciation method for its assets. In 2013, there was $2.7 billion of accumulated depreciation and amortization of capitalized interested; it increased about $.2 billion since 2012. Table 1 lays out the estimated useful lives of the assets. The company capitalizes certain computer software and development cost which are amortized over the span of 3-8 years. Next, we will be discussing Intangible Assets of the company. J&J reports $1,363 million worth of amortization expense. In 2012, they reported about $1,146 million. The average amortization periods for patents and trademarks and customer relations are...
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...ISSUES #1 In recording a business combination, the acquiring company must recognize all identifiable intangible assets of the acquired company. This process can be complex and burdensome. Recently, the Private Company Council (PCC)* provided relief from some of these requirements for private (non-public) companies. What was that “relief” and what document was issued that provided it? *PCC is an arm of the FASB that is tasked with proposing amendments to GAAP that would apply only to private (non-public companies). #1) According to the Accounting Standards Update 2014-18, Business Combinations (Topic 805), private companies should no longer “recognize separately from goodwill (1) customer-related intangible assets unless they are capable of being sold or licensed independently from the other assets of the business and (2) noncompetition agreements.” This will cut down the complexity and cost while still providing interested parties with information to make decisions off of. #2 As we saw near the end of Chapter 1, the annual testing for impairment of indefinite life intangibles (such as goodwill) is VERY complicated (very quantitative) and time consuming. A few years ago, the FASB provided a ”qualitative” alternative to the annual impairment test. Briefly describe that alternative and what document was issued that allowed that alternative? #2) This amendment allows companies use a qualitative measurement of goodwill to determine whether or not it is necessary...
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...IAS 38 International Accounting Standard 38 Intangible Assets In April 2001 the International Accounting Standards Board (IASB) adopted IAS 38 Intangible Assets, which had originally been issued by the International Accounting Standards Committee in September 1998. That standard had replaced IAS 9 Research and Development Costs, which had been issued in 1993, which itself replaced an earlier version called Accounting for Research and Development Activities that had been issued in July 1978. The IASB revised IAS 38 in March 2004 as part of the first phase of its business combinations project. In January 2008 the IASB amended IAS 36 again as part of the second phase of its business combinations project Other IFRSs have made minor consequential amendments to IAS 38. They include IAS 16 Property, Plant and Equipment (issued December 2003), IAS 1 Presentation of Financial Statements (as revised in September 2007) and Improvements to IFRSs (issued May 2008 and April 2009). © IFRS Foundation A1027 IAS 38 CONTENTS from paragraph INTRODUCTION IN1 INTERNATIONAL ACCOUNTING STANDARD 38 INTANGIBLE ASSETS OBJECTIVE 1 SCOPE 2 DEFINITIONS 8 Intangible assets 9 Identifiability Control Future economic benefits 11 13 17 RECOGNITION AND MEASUREMENT 18 Separate acquisition 25 Acquisition as part of a business combination Intangible asset acquired in a business combination Subsequent expenditure on an acquired in-process research and development project 33 35 42 Acquisition...
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...Plans Defined contribution plan - employer agrees to make a defined contribution to a pension plan plan participants receive whatever benefits have accumulated each year, employer records an expense an a related liability for the contribution Defined benefit plan - employer agrees to provide a benefit at retirement that is defines or fixed by formula employer accepts risk of meeting the obligation upon employee's retirement requires use of complex actuarial estimates Involves 2 accounting entities employer sponsor - reports pension expense on the income statement, and apension liability which is the sum of two accounts - accrued/prepaid pension cost and additional liability, and an intangible asset -deferred pension cost (if required) employee sponsor must also maintain these accounts on a memo basis -unrecognized prior service costs and unrecognized gains and losses pension plan - maintains these accounts: projected benefit obligation,accumulated benefit obligation (for reporting purposes only), vested benefits (for reporting purposes only) and plan assets Terminology Accumulated Benefit Obligation (ABO) - actuarial present value of benefits (vested or unvested) attributed by the pension benefit formula to employee services rendered before a specified date, and based on employee service and compensation prior to that date. The ABO differs from the PBO in that it includes no assumptions about future...
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...IAS 38 — Intangible Assets Overview IAS 38 Intangible Assets outlines the accounting requirements for intangible assets, which are non-monetary assets which are without physical substance and identifiable (either being separable or arising from contractual or other legal rights). Intangible assets meeting the relevant recognition criteria are initially measured at cost, subsequently measured at cost or using the revaluation model, and amortised on a systematic basis over their useful lives (unless the asset has an indefinite useful life, in which case it is not amortised). IAS 38 was revised in March 2004 and applies to intangible assets acquired in business combinations occurring on or after 31 March 2004, or otherwise to other intangible assets for annual periods beginning on or after 31 March 2004. History of IAS 38 February 1977 Exposure Draft E9 Accounting for Research and Development Activities July 1978 IAS 9 (1978) Accounting for Research and Development Activities 1 January 1980 Effective date of IAS 9 (1978) August 1991 Exposure Draft E37 Research and Development Costs December 1993 IAS 9 (1993) Research and Development Costs 1 January 1995 Effective date of IAS 9 (1993) June 1995 Exposure Draft E50 Intangible Assets August 1997 E50 was modified and re-exposed as Exposure Draft E59 Intangible Assets September 1998 IAS 38 Intangible Assets 1 July 1999 Effective date of IAS 38 (1998) 31 March 2004 Revisions to IAS 38 1 April 2004 Effective date of March...
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...Energy & Resources Accounting for Emission Rights Introduction Accounting for greenhouse gas emissions remains a challenge, and market participants continue to wait for clear guidance from accounting standards setters. Formative efforts on the part of those standards setters have proven unsuccessful. The International Financial Reporting Interpretations Committee (“IFRIC”) initially took on this task, and issued IFRIC 3, Emission Rights. Unfortunately, considerable pressure from both the business community and European politicians, who objected to the financial statement consequences of applying that interpretation, led to its withdrawal by the International Accounting Standards Board (“IASB”) within a year of its issuance. In the US, the Emerging Issues Task Force (“EITF”) also attempted to address the related accounting issues in EITF Issue 03-14, Participants’ Accounting for Emissions Allowances under a “Cap and Trade” Program. However, it was never finalized, and ultimately removed from the EITF’s agenda. More recently, organizations have been advised of informal views from both the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”) on the appropriate accounting for emissions allowances held, especially since EITF 03-14 was tabled. As a consequence, many companies remain confused about the appropriate accounting treatments under both International Financial Reporting Standards (“IFRS”) and generally accepted accounting principles...
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...Energy & Resources Accounting for Emission Rights Introduction Accounting for greenhouse gas emissions remains a challenge, and market participants continue to wait for clear guidance from accounting standards setters. Formative efforts on the part of those standards setters have proven unsuccessful. The International Financial Reporting Interpretations Committee (“IFRIC”) initially took on this task, and issued IFRIC 3, Emission Rights. Unfortunately, considerable pressure from both the business community and European politicians, who objected to the financial statement consequences of applying that interpretation, led to its withdrawal by the International Accounting Standards Board (“IASB”) within a year of its issuance. In the US, the Emerging Issues Task Force (“EITF”) also attempted to address the related accounting issues in EITF Issue 03-14, Participants’ Accounting for Emissions Allowances under a “Cap and Trade” Program. However, it was never finalized, and ultimately removed from the EITF’s agenda. More recently, organizations have been advised of informal views from both the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”) on the appropriate accounting for emissions allowances held, especially since EITF 03-14 was tabled. As a consequence, many companies remain confused about the appropriate accounting treatments under both International Financial Reporting Standards (“IFRS”) and generally accepted...
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...Effective Date | PAS 1 | Presentation of Financial Statements [superseded by PAS 1 (Revised)] | 01/01/05 | | Amendment to PAS 1: Capital Disclosures | 01/01/07 | PAS 1 (Revised) | Presentation of Financial Statements | 01/01/09 | | Amendments to PAS 32 and PAS 1: Puttable Financial Instruments and Obligations Arising on Liquidation | 01/01/09 | | Amendments to PAS 1: Presentation of Items of Other Comprehensive Income | 07/01/12* | PAS 2 | Inventories | 01/01/05 | PAS 7 | Cash Flow Statements | 01/01/05 | PAS 8 | Accounting Policies, Changes in Accounting Estimates and Errors | 01/01/05 | PAS 10 | Events after the Balance Sheet Date | 01/01/05 | PAS 11 | Construction Contracts | 01/01/05 | PAS 12 | Income Taxes | 01/01/05 | | Amendments to PAS 12 – Deferred Tax: Recovery of Underlying Assets | 01/01/12 | PAS 14 | Segment Reporting [superseded by PFRS 8] | 01/01/05 | PAS 16 | Property, Plant and Equipment | 01/01/05 | PAS 17 | Leases | 01/01/05 | PAS 18 | Revenue | 01/01/05 | PAS 19 | Employee Benefits | 01/01/05 | | Amendments to PAS 19: Actuarial Gains and Losses, Group Plans and Disclosures | 01/01/06 | PAS 19 (Amended) | Employee Benefits | 01/01/13* | PAS 20 | Accounting for Government Grants and Disclosure of Government Assistance | 01/01/05 | PAS 21 | The Effects of Changes in Foreign Exchange Rates | 01/01/05 | | Amendment: Net Investment in a Foreign Operation | 01/01/06 | PAS 23 | Borrowing Costs [superseded by PAS 23 (Revised)]...
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...Under the non-compete covenant Joint Venture disclaim the rights to any of DePuy intangible assets, including intellectual property (IP), goodwill, and customer lists. DePuy claims that Joint Venture breached the non-compete agreement which caused a drop in sales and damaged their relationship with customers in the territories outlined within the agreement.Therefore, the legality of the contract enforced due to the breach of the non-compete agreement. According to Cheeseman 2013, “the section 2-201(1) statue of sales contracts of Uniform Commercial Code laws help prevent fraud like this case” (p. 171). To avoid this case by Depuy or any other companies’ managerial setting must specify agreements with language that is comprehensible by both parties in written valid contracts. Issue:Was there a breach to the contract, under that non-compete covenant between DePuy and Joint Venture? What kind of defenses do companies use to mitigate risk related to personal, real, or intellectual property (IP) issues? The main reason this case went to court is because of the breach of non-compete agreements by Joint Venture. DePuy outlined in the Amendment Agreementthat it had retained the sole right to enforce the non-compete covenants that Joint Venture had the right to enforce (Case). This means that once Joint Venture began calling accounts in their former DePuy territories they were in breach of the Amendment Agreement, which led to the...
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...Board of Management of Kinh Do Corporation (“KDC” or the “Company”) is pleased to present its report and the consolidated financial statements of KDC and its subsidiaries (“the Group”) as at and for the year ended 31 December 2009. THE GROUP The Group consisted of KDC and its subsidiaries and associates as follows: KDC is a shareholding company incorporated under the Law on Enterprise of Vietnam pursuant to the Business Registration Certificate (“BRC”) No. 4103001184 issued by the Ho Chi Minh City Department of Planning and Investment on 6 September 2002 and the following Amended BRC: Amended BRC: Date: The first amendment The second amendment The third amendment The fourth amendment The fifth amendment The sixth amendment The seventh amendment The eighth amendment The ninth amendment The tenth amendment The eleventh amendment 26 November 2002 22 September 2003 11 December 2003 3 August 2004 7 October 2004 11 May 2005 18 May 2006 6 July 2006 6 November 2007 10 October 2008 21 January 2010 KDC was listed on the Ho Chi Minh Stock Exchange in accordance with the License No. 39/UBCKGPNY issued by the State Securities Commission on 18 November 2005. The principal activities of KDC are to process agricultural products and foods; produce confectionery, purified water, and fruit juice; sell and...
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...The Road to IFRS in India A practical guide to IFRS 1 and first-time adoption The Road to IFRS in India - A practical guide to IFRS 1 and first-time adoption 2 Introduction The Road to IFRS International Financial Reporting Standards (IFRS) is fast becoming the global accounting language. Over 100 countries have now adopted IFRS and many more have committed to make the transition in the next few years. The benefits of global standards are widely acknowledged. For companies, however, the conversion to IFRS is a major change both for the finance function and for the wider business. The International Accounting Standards Board (IASB) has recognised the need for guidance. In 2003 it published IFRS 1 First-time adoption of International Financial Reporting Standards (IFRS 1). IFRS 1 covers the application of IFRS in a company's first IFRS financial statements. It starts with the basic premise that an entity applies IFRS for the first time on a fully retrospective basis. However, acknowledging the cost and complexity of that approach, it then establishes various exemptions in areas where retrospective application would be too burdensome or impractical. IFRS convergence in India India is one of the largest jurisdictions that is currently going through the process of convergence with IFRS. Considering the diversity and complexity amongst Indian Companies that will transition to IFRS reporting, the Ministry of Corporate Affairs (MCA) has announced a roadmap which requires...
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...do share some similarities there are also several differences that could cause issue if the accounting personnel for corporations operating worldwide do not understand both accounting methods. Taking the time to learn and understand both methods will allow companies to make the best business decisions that also are compliant under the applicable method. Comparing the Two Methods Some steps which both the FASB and the IASB have taken in regards to moving the fair value measurement for the financial instruments have come a long way. FASB and ISAB are for the most part moving forward towards a fair value measurement for the financial instruments areas. "In 2012 The IASB added an amendment to the meaning of fair value would be the same under GAAP and IFRS" (willamette.com, 2012). The amendment says that the definition for fair value is exit price and the definition's for fair market value is entry price under each set of reporting standards. Each believes in the fair value measurement rule to be a much more accurate description of how a company’s financial documents stack up. Of course, there is always going to be separate opinions and when it comes to the agreeing on every aspect within the financial world. However, in order to come to a conclusion between their differences, the decision was made to come together and disclose all of the fair value information off the financial statements, and on the notes as well. In...
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...freedom of speech, freedom of religion, freedom of assembly, and most importantly the right to petition our government; all of which fall under the First Amendment in the Bill of Rights. Our nation’s flag is an everlasting symbol of freedom and hope that stands as a testament to our nation’s power. Most importantly our flag represents the freedom of the individual to express his ideals as they see fit. Therefore when the very essence of Americans freedom is challenged by the “flag amendment,” that would forbid the desecration of the American flag, a dilemma forms. While flag burning is highly offensive, it is none the less a means of expression and is protected by the constitution of America. Forbidding an individual from expressing themselves is the opposite of what our flag represents. By protecting the American flag under a constitutional amendment not only conflicts with the First Amendment, but opens a door for the government to take away even more of our rights. The First Amendment to the United States Constitution, states: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or the press; or the right of people peaceably to assemble, and to petition the government for a redress of grievances.” [Source A] The First Amendment clearly gives all citizens of the United States the...
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...PRO SIDE OF DEBATE SUMMARY for Should Churches Remain Tax Exempt? Should Churches Remain Tax Exempt: Pro Side Debate Summary This week’s Learning Team B discussion was initiated by team members' research and posting of several arguments to support our debate topic of churches remaining tax exempt. The list of arguments reflects a comprehensive range of vantage points that include constitutionality, fiscal advantage and impact to community. Subsequent team member posts articulated individual posture or provided supplemental commentary from public opinion polls and notable expert quotes. Requiring churches to pay taxes would endanger the free expression of religion and violate the Free Exercise Clause of the First Amendment of the US Constitution. Supporting comments: Being a nonprofit 501(c)(3) organization directly limits the control that the government can have on how the organization is run. If churches are stripped of their 501(c)(3) status, then the government can control them and essentially force them to do and say what the government wants (Retrieved from Debate.org opinion poll on the question: Should churches and other religious organizations remain tax exempt?) A tax exemption for churches is not a subsidy to religion, and is therefore constitutional. Supporting Quote: "The grant of a tax exemption is not sponsorship, since the government does not transfer part of its revenue to churches, but simply abstains from demanding that the church support the state...
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