ACQUIRED AT MORE THAN BOOK VALUE ANSWERS TO QUESTIONS Q4-1 The carrying value of the investment is reduced under equity method reporting when (a) a dividend is received from the investee, (b) a differential is amortized, (c) an impairment of goodwill occurs, and (d) the market value of the investment declines and is less than the carrying value and it is concluded the decline is other than temporary. Q4-2 A differential occurs when an investor pays more than or less than underlying book value
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Chapter 2 46. DLW Corporation acquired and placed in service the following assets during the year: |Asset |Date Acquired |Cost Basis | |Computer equipment |2/17 |$10,000 | |Furniture |5/12 |$17,000 | |Commercial building |11/1 |$270,000 | Assuming DLW does not elect §179
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Separate SOCF Exhibit 9 Disclosure about Reporting Date Exhibit 10 Acquisition Method of Business Combinations Exhibit 11 Comparisons of Investment in Subsidiaries of 2 years Exhibit 12 Goodwill as Intangible Assets and Computations Exhibit 13(a) Goodwill Recognized on Acquisition Date Exhibit 14 Goodwill shown in Intangible Assets Exhibit 15 Investment in A Joint Venture Exhibit 16 Equity Method of Joint Venture Exhibit 17 Adjustments to CSOFP for MFRS 11 Adoption Exhibit 18 Adjustments
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WHAT IS GOODWILL? The main method used by businesses to classify assets is to split them into tangible assets, which have a separate existence from the business (examples of which would include buildings, land and machinery), and intangibles which do not. Some clear examples of intangibles include goodwill, patents, research and development expenditure and trademarks. Intangible assets are usually created within the organisation over a period of time, by the company itself, rather than acquired
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Question 2: Accounting for Goodwill has been a contentious issue for many years. a. Using examples, explain alternative accounting methods that can be used in practice with respect to the treatment of goodwill arising on consolidation. b. Discuss the advantages and disadvantages of allowing different treatments to be used under international accounting standards for items such as goodwill. Answer. Goodwill means an intangible asset which provides a competitive advantage, such as a
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Facebook, Inc. as the company for our analysis of intangible assets. As per the intangible asset definition, we have divided the assets into 2 forms: 1. Non Amortizable asset i.e. Goodwill 2. Amortizable assets which include patents, acquired technology, trademarks & other intangible assets. As for goodwill, the impairment loss is NIL for both the accounting periods. We have shown the values in the tabular form and have done a comparison between the years at the last of the analysis.
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Case #2 Murong Feng, Duy Do, TJ Fritzgerald, Hayden Jacobs 2/13/15 Question 1 Given the facts provided for Eagle in Italy, the building is not impaired under IFRS as of December 31, 2010. The carrying value is 1,100,000, and undiscounted future cash flows are 1,150,000. The carrying value is less than undiscounted future cash flows. According to IAS36 paragraph 12, “in assessing whether there is any indication that an asset may be impaired, an entity shall consider, as a minimum, the following
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Business combination Name Institution Asset acquisition In asset acquisition the purchasing strategy in which major assets belonging to the company are to be purchased, rather than the shares of the company. This method is most popular used when the company is bankrupt and might have valuable assets which could be used by companies. Asset acquisition method may be also used where the potential target company has an unattractive financing structure, the asset acquisition strategy is also used
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To: Eagle Company (Eagle) From: Subject: Eagle in Italy and Eagle in Serbia Impairments Date: May 7th 2014 1. For Eagle in Italy, is the building impaired under IFRS as of Dec. 31, 2013, and if so what is the amount of the impairment? After reviewing the given facts provided by Eagle in Italy, we have determined that there is an impairment on their building under IFRS for the amount of $200,000. We have determined this through the use of IAS-36 as well as the calculations given below:
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Rules of Preparation of Balance Sheet A balance sheet allows you to see at a glance what your company’s assets and liabilities are. The balance sheet is basically a summary of what you own and what you owe. Assets, liabilities and owner’s capital are listed as of a certain date, usually at the end of a month, quarter or fiscal year. Your balance sheet gives you a way to determine the value of your business at any particular time. 1. * Preparation of balance sheet of company is very necessary
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