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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ZYNGA Q1. Since game development involves several phases‚ including pre-production‚ pitches‚ prototypes‚ and game design documents. Given that it usually involves 100-person team to take different responsibility for development‚ R&D is a long-term process and should be capitalized. Meanwhile‚ Zynga’s R&D costs are directly related to the production of the games hence generating profits. It is a resource of future economic benefit that owned and under control of the company‚ therefore economically
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between Holding/parent company- subsidiary………………………….2 2.1 Consolidated Financial Statement…………………………………………………….4 3.1 The concept of Goodwill……………………………………………………………...5 3.1.1 Computation of Goodwill…………………………………………………………...6 3.1.2 Computation of negative Goodwill………………………………………………...7 4.1 The recommendation of the IASB……………………………………………………8 5.1 IFRS 36 Impairment of Assets………………………………………………………..9 6.1 IFRS 38 Intangible Assets…………………………………………………………...10 Reference……………………………………………………………………………
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Accounting for Goodwill and Intangibles (1) Intangible assets acquired from JW Medical Systems (JWMS) comprise patent costs‚ customer relationships and land use rights. In accordance with IFRS 3 Business Combinations‚ Biosensors International Group (BIG) measured the cost of the acquired intangible assets as their fair value at acquisition date. According to IFRS 3.14 Business Combinations‚ guidance for recognition of intangible assets is in paragraphs B31-B40. Apart from goodwill‚ identifiable
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12‚ 13‚ 14 2. Patents; franchise; organization costs; trade name. 9‚ 10‚ 13‚ 14‚ 25 3. Goodwill. 4. 5. Brief Exercises Exercises Concepts Problems for Analysis 1‚ 2‚ 3‚ 5‚ 6 1‚ 2‚ 3‚ 4 1‚ 2‚ 3 1‚ 2‚ 3‚ 4‚ 5‚ 7‚ 12‚ 13 4‚ 5‚ 6‚ 7‚ 8‚ 9‚ 10‚ 11‚ 13 1‚ 2‚ 3‚ 4‚ 6 1‚ 2 12‚ 13‚ 14‚ 18 6‚ 8 6‚ 12‚ 13‚ 15 5‚ 6 Impairment of intangibles. 15‚ 16‚ 17‚ 18 7‚ 8‚ 9 14‚ 15 6 Research and development costs and similar
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CHAPTER 3 CONSOLIDATIONS—SUBSEQUENT TO THE DATE OF ACQUISITION Answers to Discussion Questions How Does a Company Really Decide which Investment Method to Apply? Students can come up with literally dozens of factors that should be considered by Pilgrim in making the decision as to the method of accounting for its subsidiary‚ Crestwood Corporation. The following is simply a partial list of possible points to consider. Use of the information. If Pilgrim does not monitor its own income levels
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RE: Sony’s Goodwill and Segment Reporting Facts: Sony have been known worldwide as a Japanese multinational company‚ its efforts trying to expanding business in United States‚ have made that Sony acquires CBS Records and Columbia Pictures. Thus‚ creating Sony Music and Sony Pictures‚ which represent Sony entertainment. This involved to the company in $1.2 billion of debt‚ and assigned goodwill assets for $3.8 billion. The last filing with SEC reported just two main segments: electronics and
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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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situation a client is not clear about why a Staff I is asking for information on adjusting lower of cost or market inventory valuation‚ capitalizing interest on building construction‚ recording gain or loss on asset disposal‚ and adjusting goodwill for impairment and requires explanations on these topics. An explanation of each is provided to include sources from accounting websites‚ Generally Accepted Accounting Principles (GAAP)‚ and accounting pronouncements. In addition to the explanation for
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which reduced from $23‚150 million to $16‚978 million; goodwill impairment loss is $6‚193 million and it started from the 2012 fiscal year. We can see the other accounts under income statement didn’t change that much at all. Also‚ one thing is that the impairment loss almost equals the decreased part of net income ($23‚150-$16‚978=$6193). Since the only big change is goodwill impairment loss‚ then our conclusion is that the goodwill impairment loss accounts for the decreased net income. 2.
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