10 15‚840 Implied value of 100% 16‚000 x 1.10 17‚600) Carrying amount of S Company’s net assets 13‚000 1.10 14‚300) Acquisition differential 3‚000) 1.10 3‚300) Plant and equipment 2‚000) 1.10 2‚200) Goodwill 1‚000) 1.10 1‚100) Cost of 90% of S Company Allocated: (a) The Canadian dollar is the functional currency i.e. S Company is an integrated foreign subsidiary. C = closing rate Dec. 31/1 Av = average rate year 1 H = historical
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repair buildings that we damaged in the tsunami. Property plant and equipment is recorded at cost and depreciated by the declining balance. Only one manufacturing factory and its equipment are depreciated by the straight line method. Sony also has goodwill in the amount of 40‚774 for property and equipment. How do companies account for nonmonetary exchange and dispositions of property and equipment?
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TEST BANK CHAPTER 1 Intercorporate Investments: An Overview MULTIPLE CHOICE Use the following information on a company’s investments in equity securities to answer questions 1- 4 below. The company’s accounting year ends December 31. Investment Date of acquisition Cost Fair value 12/31/13 Date sold Selling price Ajax Company stock 6/20/13 $40‚000 $35‚000 2/10/14 $32‚000 Bril Corporation stock 5/1/13 20‚000 N/A 11/15/13 26‚000 Coy Company stock 8/2/13 16‚000 16‚500 1/17/14 23‚000
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In-Process R&D a. Calculation of goodwill: Acquisition cost $ 10‚000‚000 Fair value of noncontrolling interest 2‚000‚000 Total fair value 12‚000‚000 Book value of Saylor $ 6‚000‚000 Fair value – book value: Land 500‚000 IPR&D 1‚000‚000 7‚500‚000 Goodwill $ 4‚500‚000 Allocation of goodwill between controlling and noncontrolling interest: Total goodwill $ 4‚500‚000 Pennant’s goodwill: $10‚000‚000 – 80%(7‚500‚000) 4‚000‚000 Goodwill to noncontrolling interest $
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Patrice Schumesch Sebastian Harushimana Table of contents (1/4) Introduction - Why IFRS ? - General principles Measurement of assets and liabilities - Formation expenses - Intangible assets - Property‚ plant & equipment - Leases - Impairment of assets Slide 2 Consolidation and IFRS: an introduction Table of contents (2/4) Measurement of assets and liabilities (cont’d) - Government grants - Inventories and contracts in progress - Revenue recognition - Provisions and contingencies
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isn’t any amortization of the computer under software development and is only subjected to impairment. * Another thing which should be considered when reading the report is that there is a large amount of goodwill which may lead to overstatement of assets. In those five years there isn’t any impairment loss recognized or depreciation on that goodwill. Goodwill should be every year be subjected to impairment and it’s unlikely to remain constant over five years. This may lead to overstatement of assets
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an appropriate top-down approach‚ provide firm training and guidance‚ and have effective communication with the firm’s information system specialists. Impairment of Goodwill and Long-Lived Assets Throughout my analysis‚ I noticed that every report mentioned the auditor’s failure to report sufficient procedures to assess the impairment of goodwill and long-lived assets. The most common reasons for their failure were the following: * The firm did not evaluate reasonableness of revenue growth assumptions
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The Reporting Entity and the Consolidation of Less-than-Wholly-Owned Subsidiaries with No Differential P3-33 (Page 144-145) Consolidated Worksheet and Balance Sheet on the Acquisition Date (Equity Method) Peanut Company acquired 90 percent of Snoopy Company’s outstanding common stock for $270‚000 on January 1‚ 20X8‚ when the book value of Snoopy’s net assets was equal to $300‚000. Peanut uses the equity method to account for investments. Trial balance data for Peanut and Snoopy as of January 1
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audit the current-year goodwill impairment analysis of Gator. Gator has performed its annual goodwill impairment analysis as of December 31‚ 20X3‚ with the assistance of an external valuation specialist‚ Management’s Expert. Gator elected not to perform the qualitative assessment for determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount and proceeded with Step 1 of the quantitative two-step goodwill impairment test for all reporting
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118 3 2.2 Foreign Currency Translation – AASB 121 3 2.3 Income Taxes – AASB 112 4 2.4 Consolidation – AASB 127 4 2.5 Impairment of Assets – AASB 136 4 3. Management’s flexibility in selecting key accounting policies 4 3.1 Interest Bearing Liabilities 4 3.2 Derivative Financial instruments 5 3.3 Interest Bearing Liabilities 5 3.4 Intangible Assets - Goodwill 5 4. Accounting strategy employed by management and incentivesl 5 4.1Evaluation of accounting strategy employed by management
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