company located in Spain, and the acquisition resulted in goodwill being recorded. Assume that (1) the activities in Spain represent the lowest level at which internal management monitors goodwill and (2) the Spanish operations represent CGU under IFRS and reporting unit under U.S. GAAP. At the end of 2009 under GAAP and IFRS the recoverable amount of the asset including goodwill exceeded its carrying amount, suggesting that the goodwill allocated to the Spanish operations was impaired. At the end
Words: 1398 - Pages: 6
Possible Problem/Essay Topics Chapter 1 1) Determining amount of goodwill during an acquisition (problem that includes Figure 1-3 on page 19) * Components used in determining goodwill: * The fair value of the consideration given by the acquirer * The fair value of any interest in the acquiree already held by the acquirer * The fair value of the noncontrolling interest in the acquiree, if any * The total of these three amounts, all measured at the acquisition date
Words: 3818 - Pages: 16
the equity method of accounting for investments Chapter Outline I. Three methods are principally used to account for an investment in equity securities along with a fair value option. A. Fair value method: applied by an investor when only a small percentage of a company’s voting stock is held. 1. Income is recognized when dividends are declared. 2. Portfolios are reported at fair value. If fair values are unavailable, investment is reported at cost. A. Consolidation: when
Words: 3522 - Pages: 15
Examples: patents, copyrights, franchises, goodwill, organization costs, trademarks. The same accounting issues relating to plant assets also apply to intangibles. However, by their nature intangibles are often more difficult to identify, value, and estimate a useful life. Intangibles can be categorized according to: - whether they are separately identifiable (examples included patents, trademarks, etc), or inseparable from the firm's other assets (goodwill). - whether they are externally
Words: 1574 - Pages: 7
that do not have physical substance but can be identified. This paper will review the similarities and differences within GAAP and IFRS regarding the following: intangible asset impairments, research and development (R&D), advertising cost, and goodwill impairment. Intangible Asset Impairment Testing IFRS and GAAP contain similar indicators for testing impairment of intangible assets. Differences arise in testing, recognition and presentation. GAAP requires a two-step impairment test for intangible
Words: 1504 - Pages: 7
combiner’s results of operations as if the combination took place at the beginning of the year. The future earnings of pooling companies tend to be higher than those of purchase companies, primarily because of additional depreciation and goodwill amortization. Because of the possibility of abuse, the APB placed tight restrictions on the use of the pooling method by requiring compliance with twelve criteria. Perhaps the most important (and difficult) of these requires that a company exchange
Words: 2133 - Pages: 9
the business enterprise. Intangible assets can be further categorized as either 1. Identifiable, or 2. Unidentifiable (i.e., goodwill). Identifiable intangibles include patents, copyrights, brand names, customer lists, trade names, and other specific rights that typically can be conveyed by an owner without necessarily also transferring related physical assets. Goodwill, on the other hand, cannot be meaningfully transferred to a new owner without also selling the other assets and/or the operations
Words: 13762 - Pages: 56
I am writing this memo to report several adjustments of impairment loss within the operation of Ida Inc. Ida Inc. is a manufacturing company with operations both in the United States and Spain. Therefore, I will report these adjustments of impairment loss differently according to the principles under U.S. GAAP and IFRSs. As of December 31, 2010, Ida needs to investigate the U.S. commercial building for recoverability under both U.S. GAAP and IFRSs because an event occurred recently may influence
Words: 1143 - Pages: 5
sized companies combined through an exchange of securities • Adding book values of combined asses and liabilities • Historic operating results are combined • Favored reasons: lower depreciation charges and no amortized expense for goodwill 3.
Words: 630 - Pages: 3
Three Categories. The first half of the analysis will be looking at their plant, property, and equipment, and how they depreciate it .and how they dispose of the property. The next section will discuss HPs reporting of Goodwill and Intangible Assets. After we examine the goodwill and intangible asset we will move onto Depreciation and Impairment. Then we will examine the Current
Words: 1813 - Pages: 8
