performing step one of the Goodwill Impairment Testing we will consider two separate reporting units. The first reporting unit is the business component Medical-Surgical. Step one involves comparing the carrying value (including goodwill) with the fair value of the reporting unit. Carrying Value without Goodwill Carrying Value of Goodwill Total Carrying Value including Goodwill $118,800,000 3,200,000 $122,000,000 Fair Value Difference Carrying Value including Goodwill $125,000,000 FV > CV
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Learning Team Reflection Week 2 My concerns are for the equations for the three different methods of depreciation and the accumulated depletion method. I want to understand the math of how all are calculated and how they are presented on the balance sheet statement, income statement, and understand the journaling of the different accounts. The different methods that I am referring to are: straight-line, units-of-activity, and the declining-balance. In the practice of answering the questions
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determination of income tax liability. Even in the simplest of times, thus, a firm can attain income tax savings to the extent that it can successfully classify intangible assets as something other than goodwill. Thus, it is entirely possible that the GEC Ltd. auditors reclassified some portion of the goodwill account of AEI Ltd. to some other form of intangible asset, and then effected further adjustments to reclassify some of that amount from an asset to an expense. The issue of accounting for intangible
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Memo TO: Professor Brown FROM: Carissa Lambert DATE: April 6, 2015 SUBJECT: Case 11-9 Goodwill Impairment I think that Galaxy management should have performed an interim goodwill step 1 impairment test. Although it was not required, I think it could have been beneficial considering the declines of the past few quarters. They did review ASC 350 and determined that the test was not necessary. If they reviewed ASC 350 then we might assume that they performed a qualitative assessment of the factors
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The Impairment of Goodwill As regulated by U.S. GAAP & IFRS By Russell Wickham Franklin University Dr. Thomas Hrubec The Impairment of Goodwill As Regulated by U.S. GAAP & IFRS Introduction Goodwill is an intangible asset that usually arises from the acquisition of a business. When the purchase price is determined, the difference between the purchase price and the fair market value of the net assets, i.e. fair market value of the assets minus the fair market value of the liabilities
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IMPAIRMENT Depreciation, depletion, and amortization reflect a gradual consumption of the benefits inherent in an operational asset. An implicit assumption in allocating the cost of an asset over its useful life is that there has been no significant reduction in the anticipated total benefits or service potential of the asset. Situations can arise, however, that cause a significant decline or impairment of those benefits or service potentials. An extreme case would be the destruction of a plant
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“Goodwill arises when one company acquires another company (in a business combination accounted for as a purchase) for a price in excess of the fair market value of the net identifiable assets (identifiable assets less liabilities assumed) acquired” (Fraser, Ormiston, 2013). What are the key factors in the creation of business goodwill? These are going concern, excess business income & the expectation of future economic benefits. Within a business they are three sources of goodwill. These
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Introduction We are facing a new era of economic development with a growing significance of intangible assets. Goodwill constitutes a significant asset for numerous companies, especially those which are operating in high technology industries. According to the growing importance of intangibles there has also been a significant change in standards associated with accounting for goodwill. In 2004 International Accounting Standard Board (IASB) issued
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Case 1 Goodwill Impairment Testing Should management have performed an interim goodwill impairment test as of September 30, 2010? Galaxy Sports Inc. (Galaxy) is a U.S. based manufacturer of sports equipment. It is an SEC registrant with one operating segment with three separate reporting units: fitness, golf and hockey. The fitness is the largest division of Galaxy with allocated goodwill of $200 million. The golf division reports $130 million of goodwill and the hockey has $30 million of goodwill
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diSCuSSeS and SHowS boTH wayS of meaSuRing goodwill following THe aCquiSiTion of a SubSidiaRy, and How eaCH meaSuRemenT of goodwill iS SubjeCT To an impaiRmenT Review. IMPAIRMENT RelevanT To aCCa qualifiCaTion papeRS f7 and p2 Required 1 Calculate the goodwill arising on the acquisition of High on a proportionate basis. 2 Calculate the gross goodwill arising on the acquisition of High, ie using the fair value of the NCI. Solution 1 The proportionate goodwill arising is calculated by matching the
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