is a company features in manufacturing household cleaning products. The government allocated the emission allowances (EAs) for each year. According to the Federal Energy Regulatory Commission accounting guidance for EAs, the EAs is recorded as intangible asssets. The Polluter Corp. is going to upgrade its facilities in 2014 in order to decrease the amount of greenhouse gas emitted. However, the corporation still needs additional EAs before upgrades. Hence, the Company spent $3 million to purchase
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either: – The intangible asset is expressed as a measure of revenue, or – Revenue and the consumption of the economic benefits of the intangible asset are highly correlated. Paragraph 98B clarifies that as a starting point to determining an appropriate amortisation method, and entity could determine the predominant limiting factor’ inherent in the intangible asset, for example: – A contractual term which specifies the period of time that an entity has the right to use an asset – Number of units
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reporting practice. Key words: goodwill treatment, impairment of goodwill, intangible assets 1 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
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consideration - $20 M as of acquisition date * Value of replacement stock option awards attributable to precombination services is $5M and postcombination services is $7M * Allfoods incurred $4M of acquisition related costs Fair Value of Assets Acquired and Liabilities Assumed: * Baked Beans owns manufacturing facility in CA comprised of: * Land and two buildings – could be rezoned into residential subdivision; management determined the fair value as residential property would
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synergies, overlooked problems, overbidding ACCT Standard for Business Combination 1. Purchase Method-True economic substance • Assumption: one entity acquired another for cash or combination of cash and securities • Recognition of acquired assets and liabilities at Fair Market Value • Historic operating results are not combined 2. Pooling Method • Assumption: two similar sized companies combined through an exchange of securities • Adding book values of combined asses and liabilities
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next to the liabilities. This confused the owner, who argued: My equity is my major asset and so should be shown as an asset on the balance sheet. How would you explain this misunderstanding to the owner? 2. The accountant goes on to explain that the the balance sheet shows how much a business is worth. Do you agree with this statement? Discuss. CASE 2 3.0 Valuing Brands as part of intangible product in the Balance Sheet. Millward Brown Optimor, part of WPP marketing
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IAS 38 International Accounting Standard 38 Intangible Assets In April 2001 the International Accounting Standards Board (IASB) adopted IAS 38 Intangible Assets, which had originally been issued by the International Accounting Standards Committee in September 1998. That standard had replaced IAS 9 Research and Development Costs, which had been issued in 1993, which itself replaced an earlier version called Accounting for Research and Development Activities that had been issued in July 1978. The
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A. I. An intangible asset is a non-physical asset having a useful life greater than one year. These assets are generally recognized as part of an acquisition, where the acquirer is allowed to assign some portion of the purchase price to acquired intangible assets. Examples: Patents, trademarks, copyrights, intellectual property etc. II. According to U.S. GAAP, intangible assets are only listed on the balance sheet if they are acquired assets and assets with an identifiable value and useful lifespan
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FINANCIAL ACCOUNTING 260 INTANGIBLE ASSETS QUIZ QUESTIONS 1. List two assets which would not meet the ‘identifiable’ aspect of the definition of an intangible asset. (2 Marks) 2. Intangible assets acquired via a separate acquisition are always recognised. Why? (2 Marks) 3. How is an intangible asset acquired as part of a business combination measured for initial recognition? Why? (2 Marks) 4. List two ways that fair value could be determined for intangible assets acquired as part of a
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Brittany McAlister FASB Codification part 1 CE 12.1 A. Intangible assets are assets (not including financial assets) that lack physical substance. B. Goodwill is the excess of the cost of an acquired entity over the net of the amounts assigned to assets acquired and liabilities assumed. The amount recognized as goodwill includes acquired intangible assets that do not meet the criteria in Topic 805 for recognition as an asset apart from goodwill. C. Research is planned search or
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