required. I have been hired as a consultant to research the proper accounting standards currently in place for the methods or recording patents, the useful life of patents amortization of patents, capitalization limits of patents and the impairment testing required. My immediate assumptions would be that no costs have been capitalized and no impairment testing has been done since I have been hired to research the proper accounting standards. A patent is the exclusive right granted by a government
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to restate the values of property, plant and equipment to a fair value; fair value is the amount for which an asset could be exchanged or a liability settled between knowledgeable, willing partners in an arm’s length transaction. Such a policy must be applied to all asset of a particular class. It would therefore be acceptable for an entity to revolve free hold properties every three (3) years. The revaluation must be made with sufficient regularity to ensure that the carrying value does not differ
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acquisition method was the accounting method used to account for acquisitions before 2009. In the acquisition method, there are two methods of accounting – acquisition accounting and merger accounting. The acquisition has to be valued at fair value and the difference between the purchase price and fair value has to be recognized as goodwill. Purchase method also has certain features similar to those of merger accounting. This method helps in having a uniform mode of accounting for expenditures related
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Memorandum TO: FROM: RE: DATE: The purpose of this memo is to determine whether the transfer provisions preclude sale accounting, and if so, would sale accounting be appropriate after the initial transfer if the provision in question was eliminated. UpBeat, Inc. is a successful company located in Greenville South Carolina. Sales have substantially exceeded budgeted amounts and look to get even better. Upon reviewing of the monthly reporting package and cash flow projections it can be
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by an independent accounting firm revealed that intangible assets account for 80% of the S&P 500’s total value (Nearon, 2008). This study researched United States (US) companies’ and indicated 40% of market value is not reflected in their balance sheet (Nearon, 2008). This decline in market value has led to strong arguments for rethinking the measurement and treatment for intangibles assets. International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP)
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long-term care facility is an entity. Accounting records may be kept for that entity as a whole. However, the hospital, nursing school, medical school, and long-term care facility that make up the medical center are each entities as well. Financial records could be maintained separately for each of these subentities. When financial statements are prepared, it is important to identify the specific identity of the entity to which the statements relate. All accounting transactions must take the perspective
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depletion for natural resources, and amortization for intangibles. Question 11-2 The term depreciation often is confused with a decline in value or worth of an asset. Depreciation is not measured as decline in value from one period to the next. Instead, it involves the distribution of the cost of an asset, less any anticipated residual value, over the asset's estimated useful life in a systematic and rational manner that attempts to match revenues with the use of the asset. Question
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both the FASB and IASB to move to fair value measurement for financial instruments? In what ways have some of the approaches differed? Under either system, companies will be required to report assets at either book value or fair value, depending on the situation. Fair value measurements provide users of financial statements with an accurate picture of the value of a company’s assets. Both IFRS and GAAP require firms to include information regarding fair value measurement practices in the notes
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securities and describe the accounting and reporting treatment for each category. 1 2. Understand the procedures for discount and premium amortization on bond investments. 1, 2, 3, 4 2, 3, 4, 5 1, 2, 3, 4, 7 3. Identify the categories of equity securities and describe the accounting and reporting treatment for each category. 5, 6, 8 1, 6, 7, 8, 9, 11, 12, 14, 15, 16 3, 5, 6, 8, 9, 10, 11, 12 4. Explain the equity method of accounting and compare it to the fair value method for equity securities
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Product An interesting once in awhile event as a Renaissance Fair has become a more realistic hobby for many people in the Pennsylvania Region. Within one hour of Easton, Pennsylvania, one of the centre points of the tri-state area there are over 60 different Live Action Role-Playing Events on a monthly basis. Generally, these events start Friday Evening and end in Sunday in the afternoon. These games are interactive Renaissance Fairs where people act the part of a hero or villain of their choosing
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