Eagle Impairment Case Question 1 IFRS According to the facts provided for Eagle in Italy‚ we assume that the commercial building‚ which represents a cash-generating unit (CGU)‚ meets the requirement for a recoverable test under IFRS. The impairment loss is required when the building’s book value exceeds the higher of the asset’s value-in-use and fair value less costs to sell. Carrying value 1‚100 > 900 Higher of Value in use (900)
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References: http://blog.accountingcoach.com/capitalized-interest-capitalization http://www.accountingformanagement.com/cost_or_market_whichever_lower.htm http://www.fool.com/investing/general/2009/03/13/goodwill http://www.ih2000.net/kemoffatt/acct_2302_mgrl/gains_losses Schroeder‚ R. G.‚ Clark‚ M. W.‚ & Cathey‚ J. M. (2011). Financial accounting theory and analysis: Text readings and cases (10th ed.). Hoboken‚ NJ: Wiley.
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My community service was done at Goodwill Super store on 11/4/13-11/5/13. Goodwill is an organization that sells clothes‚ furniture‚ shoes‚ toys‚ decorations‚ curtains to almost anything you will find similar to a TJ Maxx store. But these items are donated from people who do not need their items anymore and these items will sell for much less than a retail store. Goodwill is mostly for people who can not afford the things that they need in life because they ay be struggling with a money problem
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Goodwill Impairment and Fair Value Measurement: Hewlett-Packard’s Acquisition of Autonomy Abstract In today’s business environment‚ mergers and acquisitions are becoming increasingly common. Mergers and acquisitions create many accounting challenges including issues of fair value measurement and the associated topic of goodwill impairment. The fair value measurement of an acquired company usually entails using a Level 2 fair value estimate‚ or using a market or income approach‚ both level three
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have 370‚000 more potential customers as compared to non-halal competitors. Also‚ high quality packaging is used by Cinnabon to uphold a strong brand image. 3.2 Weaknesses- The franchisee is not able to grow the Cinnabon brand‚ own copyright and goodwill. Customer service may also vary based on the training given by the Franchisor. The Franchise fee and ongoing fee may also decrease profitability and workers will need to clock in longer hours to be profitable. It is also uncertain whether the Franchisor
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draft on testing goodwill for impairment. Under the proposal‚ entities would have the option of performing a qualitative assessment before calculating the fair value of the reporting unit (i.e.‚ step 1 of the goodwill impairment test). If entities determine‚ on the basis of qualitative factors‚ that the fair value of the reporting unit is more likely than not greater than the carrying amount‚ a quantitative calculation would not be needed. The proposal would not change how goodwill is calculated or
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project. 1. To who is this report disseminated and how is this done? This report disseminated to following:- * Employees * Shareholders * Managements * Investors * Board of director * Government And this can be done by emails‚ newsletters‚ publishing in company magazines‚ post and by publishing on company websites. 1. Why do these people need the information contained in the annual report Employees: - it is important that the employees know about the company annual
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Chapter 12 Homework Questions Q1. What are the two main characteristics of intangible assets? The two main characteristics of intangible assets are: (a) they lack physical substance. (b) they are not a financial instrument. Q4. Why does the accounting profession make a distinction between internally created intangibles and purchased intangibles? When intangibles are created internally‚ it is often difficult to determine the validity of any future service potential. To permit
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Disney’s customers‚ making Disney more attractive to young adulthood and beyond. b. Goodwill=Fair value of acquisition-Marvel’s total equity =4‚000‚000‚000-454‚759‚000=$3‚545‚241‚000 c. The higher acquisition makes larger goodwill‚ that is to say‚ the premium paid by Disney increases goodwill. Under the 100 percent acquisition‚ the 29 percent premium does not affect the computation of goodwill. The only thing that matters is the amount Disney paid to acquire Marvel Entertainment
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formed to take over the assets of two or more previously separate companies and all of the combining companies are dissolved. 4 Goodwill arises in a business combination accounted for under the purchase method when the cost of the investment (price paid plus direct costs) exceeds the fair value of identifiable net assets acquired. Under FASB Statement No. 142‚ goodwill is no longer amortized for financial reporting purposes and will have no effect on net income. 5 Negative
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