still take into consideration the accounting method of past business combinations when this information is no longer disclosed in the financial statements. In addition to the testing of the impact of the accounting methods, the value-relevance of goodwill amortization is investigated. The sample consisted of 100 U.S. business combination transactions during the period 1985–1995 (77 pooling firms and 23
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filed with the U.S. Securities and Exchange Commission (“SEC”), A2 Auto has disclosed within Note 24, Segment Information, that it has four operating segments: (1) A2 Americas, (2) A2 Asia Pacific, (3) A2 Others, and (4) Financial Services. Note 12, Goodwill and Other Intangibles, disclose that A2 Auto has the same four reporting units. ACCOUNTING QUESTIONS 1. What are the appropriate criteria for the grouping of long-lived assets to be held and used for impairment testing purposes? 2. On
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intangible assets, including customer list and the trade name, acquired in business combination being recognized separate from goodwill and book the assets at their FMV. The rest of the purchase discrepancies are allocated to goodwill. Intangible assets with finite life, like customer list, should be amortized over its useful life. Those with indefinite useful life, like goodwill and trade name, are not amortized but must be tested for impairment at least annually and whenever there is an indication of
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| | |CONSOLODATION: | |US GAAP vs IFRS | | | |
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used in assessing indicators of impairment. (1 Mark) 11. Name two (2) internal sources of information used in assessing indicators of impairment. (1 Mark) 12. Under IAS 36, which of the following assets are subject to impairment testing: a) goodwill, b) patent, c) inventory, d) receivables, e) property, plant and equipment. (1 Mark) 13. When does an impairment loss occur? (1 Mark) 14. At reporting date, Frankston Limited estimated an impairment loss of $50,000 against its single cash-generating
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why the information was requested. The concerns include the reason for the adjusting lower cost of market inventory valuation, the capitalizing interest on building construction, the recording of gain or loss on asset disposal, and the adjusting goodwill for impairment. Please rest assured that we will do our best to answer your questions and settle your concerns with anticipation that your trust will be gained and our relationship will flourish tremendously. The Financial Accounting Standards
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College Number(Bottom Left of College Card) | 100724676 | Year: | 3 | Course Code | MN3245 | Course Tutor: | Professor Christopher Napier1 | Assignment No.: | 1 | Degree Title: | Management with Accounting | Question No. & Title: | Fair Value Accounting Standard | Candidate Number: 1401240 Fair Value Accounting International Accounting Standard Board defines Fair Value and it gives a guide on how to measure it in the IFRS13 section. Fair Value is “ the price that would
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INVESTMENT IN ASSOCIATE Intercorporate share investment * the purchase of the equity securities of one entity by another entity * case of one entity investing in another entity through the acquisition of share capital Significant influence * power to participate in the financial and operating policy decisions of the investee but not control or joint control over those policies Control * power to govern the financial and operating policies of an entity so as to obtain benefits from
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CHAPTER 1 ANSWERS TO QUESTIONS 1. Internal expansion involves a normal increase in business resulting from increased demand for products and services, achieved without acquisition of preexisting firms. Some companies expand internally by undertaking new product research to expand their total market, or by attempting to obtain a greater share of a given market through advertising and other promotional activities. Marketing can also be expanded into new geographical areas. External expansion
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impairment loss as the difference between the recoverable amount f the asset and its carrying value Impairment testing for intangible assets with indefinite useful lives (example: goodwill): as singlestep process; i.e., if the recoverable amount is less than carrying value, asset is impaired by the difference – note that goodwill is no longer amortized but tested for impairment. Key Objectives: Prepare consolidated financial statements for the first and subsequent year ends after acquisition
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