...Research paper | | | ACC 620 - Advance entities Contents: Introduction 2 Accounting standards of goodwill development 3 Affection on SFAS 141 and SFAS 142 4 The definition of goodwill 4 Contribution to the creation of goodwill 5 Goodwill inclusion and exclusion 6 Identification of goodwill and intangible assets 7 Calculation of goodwill 7 Goodwill impairment 10 Comparison IFRS with U.S. GAAP for goodwill 11 Conclusion 13 References 14 Introduction: When one company gains control over the others, a business combination is established. As a part of this process, reciprocal accounts and intra-entity transactions must be adjusted or eliminated to ensure that all reported balances truly represent the single entity and current financial reporting standards require the acquisition method to account for business combinations. However, in many cases, the parent records both the consideration transferred and the individual amount of the identified assets acquired and liabilities assumed at their acquisition-date fair values are difference. Thus, GAAP requires the acquirer recognizes the asset goodwill as the excess of the consideration transferred over the collective fair values of the net identified assets acquired and liabilities assumed. Nevertheless, in a business combination, assets of the purchase price and book value of assets varies greatly. Such as the 1989 Time and Warner merged the two companies to pay the $ 14...
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...Accounting standards for business consolidations XXXX ACC 407 Your name Date Accounting standards for business consolidations In competing market it is very common for one business to merge with another one. In order to survive in this rivalry marketplace, Companies need to expand business to the most profitable capacity. No matter what kind of reasons for company seeking extension under the ownership, the main one is to track potential profit. Today’s business environment Financial Accounting Standards Board (FASB), one of regulators represented concepts related with business combinations. Below is my briefly understanding of accounting standards of business combination. What is the history of account for business combinations? How many businesses are consolidated with each other? Companies often learn that entry into new product areas or geographic regions is more easily accomplished by acquiring or combining with other companies than through internal expansion. For example, SBC Communications, a major telecommunications company and one of the “Baby Bells,” significantly increased its service area by combining with pacific Telesis and Ameritech, later acquiring AT&T ( and adopting its name), and subsequently combining with BellSouth. Moreover, Cingular Wireless, the largest provider of mobile wireless communications in the United States and now part of AT&T, was operated as a joint venture of AT&T (Baker, R. E., Christensen, T., & Cottrell, D. (2011))...
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...Organizacija, Volume 41 Research papers Number 6, November-December 2008 DOI: 10.2478/v10051-008-0023-5 Accounting Treatment of Goodwill in IFRS and US GAAP Mateja Jerman, Massimo Manzin University of Primorska, Faculty of Management, Cankarjeva 5, 6000 Koper, Slovenia, mateja.jerman@fm-kp.si, massimo.manzin@fm-kp.si The article presents an overview of the new accounting treatment of goodwill regarding International Financial Reporting Standards and American Generally Accepted Accounting Principles. Goodwill acquired through a business combination is no longer amortized but tested for impairment. Despite the fact that the objective of the new International Financial Accounting Standard has been to move towards international convergence; significant differences between standards still exist. The article presents the main changes of the regulation in the last years and the key differences between the two accounting treatments. In spite of the new accounting approach there are still lots of discussions, which indicate that the field is still not properly regulated. Finally, the article offers possible directions for future research and reporting practice. Key words: goodwill treatment, impairment of goodwill, intangible assets 1 Introduction We are facing a new era of economic development with...
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...Client Understanding Kelly Ableman ACC/541 August 5, 2013 Jonathan Rubin As a newly hired Staff I, the responsibilities that are required are to analyze the work papers for one of the clients of the organization. This client is not clear about why the company is asking for information on the following topics: adjusting lower cost of market inventory on valuation; capitalizing interest on building construction; recording gain or loss on asset disposal; and adjust goodwill for impairment. This paper will strive to answer these questions for the client. Adjusting Lower Cost of Market Inventory on Valuation One of the requirements of the Generally Accepted Accounting Principles (GAAP) is that inventory be recorded at lower of cost or market rule, also known as LCM. In a company’s’ financial statements, assets are generally stated in the financial statements according to the cost principle. However, when it comes to inventory, cost principle is abandoned and lower of cost or market rule takes its place. The LCM states that inventory should be measured at the lower of cost or market value (Accounting Explained). What market value means basically is the replacement cost of the company’s inventory. This replacement cost can be in the form of a purchase cost or a manufacturing cost; simply stated, market value is the amount a company would have to pay to acquire their inventory of the same quantity and quality through purchase or through manufacturing. There are upper...
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...Recent Activities at the FASB Presentation Transcript 1. Recent Activities at the FASB Corporate Reporting and Governance Conference California State University, Fullerton September 2005 Katherine Schipper, Financial Accounting Standards Board The views expressed in this presentation are my own, and do not represent positions of the Financial Accounting Standards Board. Positions of the Financial Accounting Standards Board are arrived at only after extensive due process and deliberation. 2. Overview Financial reporting topics Exposure draft, Business Combinations (joint with the IASB) Exposure draft, Consolidated Financial Statements, Including Accounting and Reporting of Noncontrolling Interests in Subsidiaries (a replacement of ARB 51) Fair value measurement Proposals for optional fair value measurements Exposure draft, Accounting for Uncertain Tax Positions, an interpretation of SFAS 109 Performance reporting Share based payment (SFAS 123R) 3. Joint IASB-FASB project on business combinations Intent => replace SFAS 141 and converge with international standards Will include mutual enterprises Will include acquisitions of businesses through means other than a purchase of net assets or equity interests A separate project is addressing business combinations involving not-for-profit organizations General principle: recognize assets acquired and liabilities assumed in a business combination at fair value Exceptions : income taxes, benefit plan obligations, operating...
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...beverage products. The merger agreement between PepsiCo and Quaker Oats dated December 2, 2000 (completed acquisition on August 2, 2001) significantly increased PepsiCo’s market share and revenues. Therefore, consumers of PepsiCo products have increased exponentially, both in the United States and internationally. Prior to acquiring Quaker Oats, PepsiCo was approaching “the global saturation point in terms of cola sales” (Jaffe, 2001). It is no secret that the world is trending toward healthier snacks and drinks. Medical studies linking soda consumption to childhood obesity will begin to eat away at PepsiCo’s profits. Acquiring Quaker Oats (the maker of Gatorade) will allow PepsiCo to expand further into the noncarbonated drink business. The $13.4 billion stock acquisition (Sorkin & Winter, 2000) of Quaker Oats will seem like a bargain once profits from Gatorade and the Quaker snacks start rolling in. PepsiCo has the means and capability to distribute beverages AND snacks, as Frito Lay is their largest subsidiary. “Pepsi plans to use Quaker’s granola bars as the foundation of a line of healthy snacks” (Forbes.com, 2001). The noncarbonated beverage of Gatorade and healthy snacks of Quaker will give PepsiCo a competitive edge in keeping up with consumers’ demand of healthier products. There were three distinct stipulations with PepsiCo’s acquisition of Quaker Oats. Two of these stipulations were mandated by the Federal Trade Commission due it its...
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...in standard setting$ Abigail Allen, Karthik Ramanna n Harvard Business School, USA a r t i c l e in f o abstract Article history: Received 15 September 2010 Received in revised form 24 May 2012 Accepted 25 May 2012 Available online 7 June 2012 We investigate the effect of standard setters in standard setting. We examine how certain professional and political characteristics of FASB members and SEC commissioners predict the accounting ‘‘reliability’’ and ‘‘relevance’’ of proposed standards. Notably, we find FASB members with backgrounds in financial services are more likely to propose standards that decrease ‘‘reliability’’ and increase ‘‘relevance,’’ partly due to their tendency to propose fair-value methods. We find opposite results for FASB members affiliated with the Democratic Party, although only when excluding financialservices background as an independent variable. Jackknife procedures show that results are robust to omitting any individual standard setter. & 2012 Elsevier B.V. All rights reserved. JEL classification: D72 D78 G18 K22 L51 M41 Keywords: Accounting FASB Politics Relevance Reliability Standard setting 1. Introduction As the Financial Accounting Standards Board (FASB) closes in on four decades, the role of its standards in shaping U.S. and international corporate reporting is widely acknowledged. An empirical literature on the political economy of FASB standard setting has emerged over that period to explore the origins...
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...Arithmetica, Geometrica”, the first accounting textbook. It illustrated double-entry accounting, a system that makes the modern corporation manageable, even possible. Today, half a millennium later, Pacioli’s process, still pretty much intact, is being challenged like never before. Pacioli’s accounting system lets businesses keep track of changes in their assets. But this system deals primarily with tangible assets such as cash, inventory, investments, receivables, property, plant, and equipment. What go unrecorded are intangible assets such as quality of management, customer loyalty, information infrastructure, trade secrets, patents, goodwill, research, and, considered by some, the ultimate intangible, knowledge—a company’s intellectual capital. FASB chairman Edmund Jenkins attests, “The components of cost in a product today are largely R & D, intellectual assets, and services.” Professor James Quinn of Dartmouth College said, “Even in manufacturing, perhaps three-fourths of the value added derives from knowledge.’’ This refrain is echoed by...
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...APPENDIX C UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 31, 2009 ‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 000-22754 URBAN OUTFITTERS, INC. (Exact Name of Registrant as Specified in Its Charter) Pennsylvania (State or Other Jurisdiction of Incorporation or Organization) 23-2003332 (I.R.S. Employer Identification No.) 5000 South Broad Street, Philadelphia, PA (Address of Principal Executive Offices) 19112-1495 (Zip Code) Registrant’s telephone number, including area code: (215) 454-5500 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Exchange on Which Registered Common Shares, $.0001 par value The NASDAQ Global Select Market LLC Securities registered pursuant to Section 12(g) of the Act: None Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes È No ‘ Indicate by checkmark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ‘ No È Indicate by checkmark whether the registrant (1) has filed all reports required to be filed...
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...Accounting for Business Combinations: A Test for Long-Term Market Memory By Pongprot Chatraphorn Dissertation submitted to the faculty of the Virginia Polytechnic Institute and State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY In Business Administration with a Concentration in Accounting Dr. John A. Brozovsky, Chair Dr. Anthony J. Amoruso Dr. Robert M. Brown Dr. Frederick M. Richardson Dr. Keying Ye December 19, 2001 Blacksburg, Virginia Keywords: Business Combinations, Mergers, Acquisitions, Pooling, Purchase Accounting Copyright 2001, Pongprot Chatraphorn Accounting for Business Combinations: A Test for Long-Term Market Memory Pongprot Chatraphorn ABSTRACT The purpose of this research is to examine whether accounting methods for business combinations (purchase and pooling-of-interests accounting) have a different effect on firms’ market value of equity in the combination year and thereafter. In particular, after the accounting method is no longer disclosed in the financial statements, does it have an impact on market value of equity of the combined firms because the accounting figures are different? A five-year period subsequent to a particular business combination is used because public companies are not required to disclose the details of the combination for more than three years after the effective date of the combination. This research, thus, tests whether market participants still take into...
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...Chapter 3 Consolidations – Subsequent to the Date of Acquisition Chapter Outline I. Consolidation — the Effects Created by the Passage of Time A. The present chapter examines the consolidation procedures that must be followed in subsequent periods whenever separate incorporation of the subsidiary is maintained. B. Purchase combinations will continue to require a different set of procedures than a pooling of interests because of allocations and amortization. C. A worksheet and consolidation entries continue to provide structure for the rendering of a single set of financial statements for the combined entity. D. When a time factor is included in the consolidation process, additional complications are encountered. 1. The parent must select and apply an accounting method to cover the relationship between the two companies. The investment balance recorded by the parent varies over time as a result of the method chosen, as does the income consequently recognized. 2. The parent’s investment balance is eliminated on the worksheet so that the subsidiary’s actual assets and liabilities can be consolidated. 3. Additionally, the income figure accrued by the parent is excluded each period so that the subsidiary’s revenues and expenses can be included can be included when creating an income statement for the combined entity. ...
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... 1 © 2009 DeVry/Becker Educational Development Corp. All rights reserved. Becker CPA Review, PassMaster Questions Lecture: Financial 1 Sources of GAAP CPA-00001 Type1 M/C A-D Corr Ans: D PM#1 F 1-01 1. CPA-00001 FARE Nov 95 #1, Released 2006 Page 6 According to the FASB conceptual framework, the objectives of financial reporting for business enterprises are based on: a. Generally accepted accounting principles. b. Reporting on management's stewardship. c. The need for conservatism. d. The needs of the users of the information. CPA-00001 Explanation Choice "d" is correct. The FASB conceptual framework states that the objectives of financial reporting stem from the informational needs of the external users of the information. SFAC 1 para. 28 Choice "a" is incorrect. Generally accepted accounting principles (GAAP) are derived from and based on the objectives of financial reporting, not the other way around. Choice "b" is incorrect. Information concerning management's stewardship is only one aspect of the information financial statements are intended to provide. SFAC 1 para. 50 Choice...
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...Form 10-K 1 of 56 http://www.sec.gov/Archives/edgar/data/1046501/000104596903000752... 10-K 1 d10k.htm FORM 10-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) x Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended December 29, 2002 or ¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From to . Commission file number 0-25721 BUCA, INC. (Exact name of registrant as specified in its charter) Minnesota 41-1802364 (State or other jurisdiction of incorporation or organization) (I.R.S. employer identification no.) 1300 Nicollet Mall, Suite 5003 Minneapolis, Minnesota 55403 (Address of principal executive offices) (Zip code) (612) 288-2382 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: common stock, par value $.01 per share. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨ Indicate by check mark if disclosure of delinquent filers pursuant...
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...About Google! 2008 Annual Report Unemployment 100 80 60 40 20 0 100 80 60 40 20 0 Foreclosure ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 We are all in uncharted waters. – CEO Eric Schmidt Query volume index for “unemployment” and “foreclosure” from Google Trends 2008 Founders’ Letter Since 2004, when Google began to have annual reports, Larry and I have taken turns writing an annual letter. I never imagined I would be writing one in the midst of an economic crisis unlike any we have seen in decades. As I write this, search queries are reflecting economic hardship, the major market indexes are one-half of what they were less than 18 months ago, and els. unemployment is at record levels. Nonetheless, I am optimistic about the future, because I believe scarcity breeds clarity: it focuses minds, forcing g people to think creatively and rise to the challenge. While much smaller in scale than today’s global collapse, e, the dot-com bust of 2000-2002 pushed Google and others in the industry to make some tough decisions — and we all emerged stronger as a result. This new crisis punctuates the end of our first decade e as a company, a decade that has brought great change to Google, the web and the Internet as a whole. As I reflect on this short time period, our accomplishments and our shortcomings, I am very excited about what the next 10 years may bring. But let me start a little farther back — in 1990, the very first web...
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...staked out a position at the forefront of 4G telecommunications. We hold a market-leading position in WiMAX deployments around the world. In 2008, we demonstrated the world’s first WiMAX 802.16e mobile handoff and the industry's first over-the-air data sessions in the 700 MHz spectrum using the Long Term Evolution standard, the next evolution of mobile broadband. With the rapid convergence of fixed and mobile broadband Internet and the growing demand for next-generation mobile communication solutions, our mission is to lead the next wave of innovative products that meet the expanding needs of our customers around the world. The trends toward media mobility, ubiquitous connectivity, and wireless flexibility coupled with mobile lifestyles and business continue to expand. Today, Motorola has a portfolio of technologies, solutions and services – including wireless handsets, wireless accessories, digital entertainment devices, wireless access systems, voice and data communications systems, and enterprise mobility products. We operate in numerous countries around the globe, tapping the creativity of diverse cultures and individuals. And we demonstrate each day, at every site and in...
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