IAS 38 Intangible Assets outlines the accounting requirements for intangible assets‚ which are non-monetary assets which are without physical substance and identifiable (either being separable or arising from contractual or other legal rights). Intangible assets meeting the relevant recognition criteria are initially measured at cost‚ subsequently measured at cost or using the revaluation model‚ and amortised on a systematic basis over their useful lives (unless the asset has an indefinite useful
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A. i. In general‚ what is an intangible asset? An intangible asset is an asset that does not have physical substance. Some examples include patents‚ copyrights‚ and goodwill. ii. Which intangible assets appear on a company’s balance sheet under U.S. GAAP? Describe how U.S. GAAP determines whether an intangible asset is included in the balance sheet. iii. Briefly describe how the accounting for intangibles differs under IFRS. To answer this question‚ you might use the Internet and search
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Australian standards including AASB 1041 Revaluation of Non-Current Assets‚ AAS 4 Depreciation‚ AAS 10 Recoverable Amount of NonCurrent Assets‚ AAS 21 Acquisitions of Assets‚ AAS 13 Accounting for Research and Development Costs and AAS 18 Accounting for Goodwill. AASB 138 also covers some of the general principals covered in Statement of Accounting Concepts (SAC) 4. This Policy Summary goes through the main requirements in AASB 138 and also outlines the main differences between the general requirements
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discounting the cash flows for the Macinaw Division and which of the appropriate discount rate for computation of goodwill impairment. The case mentioned about impairments which will be written down after the assets are tested for impairments and how the impairment loss will be allocated among group of assets. The audit memo gives the answer about whether long-lived asset or goodwill write-downs due to impartment or write-ups if the fair value subsequently increases. Fact: To take advantage of
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A SYNOPSIS OF ACCOUNTING FOR BUSINESS COMBINATIONS‚ INTANGIBLES AND GOODWILL IMPAIRMENT INTRODUCTION During the 1980 ’s and 1990 ’s a great number of business mergers and acquisitions took place. The generally accepted accounting principles to record the initial transaction and to account for the acquired assets during their estimated useful lives this were well established. Over time however‚ users of financial statements began to question whether those principles and practices accurately
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3 Scope of IAS 36 IAS 36 applies to (among other assets): – Tangible assets • Land and buildings • Machinery and equipment • Ships‚ aircrafts‚ motor vehicles • Investment property carried at cost (see IAS 40) – Intangible assets • Goodwill • Computer software • Patent‚ brand‚ customer list • Development costs 4 Definitions Impairment : – An asset is impaired when its carrying amount exceeds its recoverable amount Carrying amount : – The amount at which an asset is recognised
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Purchase Method of Accounting All business combinations must be accounted for by applying the purchase method. This involves 3 key steps: a) Identifying an acquirer‚ b) Measuring the cost of the business combinations and c) Allocating the cost of the business combination to the identifiable assets and liabilities acquired. a) Identifying the Acquirer The acquirer should be identified for all business combinations‚ The acquirer is the entity which obtains controls over the other entity‚ There
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Sales Returns and Allowances $30‚000. BE9-13 Information related to plant assets‚ natural resources‚ and intangibles at the end of 2011 for Spain Company is as follows: buildings $1‚100‚000; accumulated depreciation—buildings $650‚000; goodwill $410‚000; coal mine $500‚000; accumulated depletion—coal mine $108‚000. Prepare a partial balance sheet of Spain Company for these items. Exercise Do It! 9 Match the statement with the term most directly associated with it E9-9
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goodwill. implied offering price. takeover premium. 5. If the value implied by the purchase price of an acquired company exceeds the fair values of identifiable net assets‚ the excess should be allocated to reduce any previously recorded goodwill and classify any remainder as an ordinary gain. allocated to reduce current and long-lived assets. allocated to reduce long-lived assets. accounted for as goodwill.
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WEEK 5 / ASSIGNMENT 1 Case Analysis: Nantucket Nectars PRO’s & CON’s Tom Scott and Tom First founded Nantucket Nectars in 1990 as a small side-business on Nantucket’s Straight Wharf. A peach fruit juice drink that Tom First discovered while visiting Spain inspired him and his partner to embark upon the journey of building their juice company. After only six years‚ the two entrepreneurs built a business that was generating $29‚493‚000 per year in revenue and $969‚000 in EBITDA. With remarkable
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