Discuss The Impact Of Key Audit Matter On Telsstra

Increases or decreases in the value of assets owned by the corporation, including tangible assets such as land and buildings, and intangible assets such as goodwill.

SUMMARY OF STUDY OBJECTIVES 1Identify the sections of a classified balance sheet. In a classified balance sheet, companies classify assets as current assets; long-term investments; property, plant, and equipment; and intangibles. They classify liabilities as either current or long-term. A stockholders' equity section shows common stock and retained earnings. 2Identify and compute ratios for analyzing a company's profitability. Profitability ratios, such as earnings per share (EPS), measure aspects of the operating success of a company for a given period of time. 3Explain the relationship between a retained earnings statement

Cisco allocates the fair value of the purchase consideration of its acquisitions to the tangible assets, liabilities, and intangible assets acquired. The excess fair value of the purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

when dealing with their number one assets: telecommunication licenses and Goodwill. A summary of the critical accounting estimates used in preparing Verizon financial statements is as follows: Wireless licenses and Goodwill are a significant component of the company’s consolidated assets. Both wireless licenses and Goodwill are treated as indefinite-lived intangible assets and, therefore are not amortized, but rather are tested for impairment annually in the fourth fiscal quarter, unless there are events requiring an earlier assessment or changes in circumstances during an interim period that indicate these assets may not be recoverable. Verizon believes its estimates and assumptions are reasonable and represent appropriate marketplace considerations as of the valuation date. Although the company uses consistent methodologies in developing the assumptions and estimates underlying the fair value calculations used in its impairment tests, these estimates are uncertain by nature and can vary from actual results. It is possible that in the future there may be changes in the assumptions, including estimated cash flow projections, margins, and growth rates and discount rates which could result in different fair value estimates and an impairment charge.

Financial statements indicate that the carrying value of the total net assets, $51,271 is greater than then predicted fair value of $37,800. This indicates that impairment potentially exists, and further analysis shall be conducted. In the second step of the qualitative assessment, Sprint’s fair value of goodwill is predicted to be $17,246 assuming the company’s share price falls to $14 in the fourth quarter. The fair value estimate is lower than the carrying value of $30,718, indicating that impairment has occurred. Sprint’s loss on impairment, the difference between the fair and book value, is calculated to be $13,471.

All of these identifiable intangible assets meet the contractual-legal criterion for the recognition of intangible assets as required by ASC…..(FIND STD FOR INTANGIBLE ASSET CRITERION). Tom’s Tractor also acquired Tractor Heaven. Among the assets acquired from Tractor Heaven are a customer list, and a non-contractual relationship with Bonanza Farming. One-half of the customer list has confidentiality agreements attached to them and therefore do not meet the separability or contractual-legal criterion for the recognition of intangible assets. Therefore, the one-half of the customer list that does not contain confidentiality agreements does meet the separability criterion for intangibles and is an identifiable intangible asset that is listed separately from goodwill. The customer relationship with Bonanza Farming is contingent on the details of the relationship as more information is needed to make a judgment. The net result of Tom’s acquisitions is less externally purchased goodwill on the balance sheet and more intangible assets separately listed. Furthermore, this gives investors more information concerning the reasons for acquiring these two companies (i.e. it will be more obvious to users that the business purpose for purchasing Tractor Heaven and RLS is due to their customer relations needed for Tom’s Tractor to gain market share, increase customer awareness, etc.)

To elaborate farther, the Board has identified 3 key components in the determination of “Core goodwill”. The asset in question must contain these essential characteristics, in order to be classified as such. Also noted in Concept

This paper attempts to explain aspects about assets and their importance in accounting to report accurate information about the company. Assets give an indication as to the strength of the business, its ability to generate income, the capability to produce a profit and the means it has to pay its debt. Creditors and shareholders have a vested interest in making sure their notes will be paid, or profits will be generated.

The objective of this project is to reduce the cost and complexity of the subsequent accounting for goodwill for public business entities and NFP entities. This project will determine if certain intangible assets, such as customer relationships and non-compete agreements, should be included in goodwill. Research will be done to identify the most appropriate useful life of goodwill if it were to be amortized and on simplifying the impairment test (Hillenmeyer & McMillen, 2013).

Tim Krumwiede College of Business Bryant University Smithfield, Rhode Island USA Emily Giannini Graduate Student, College of Business Bryant University Smithfield, Rhode Island USA ABSTRACT This case requires a detailed analysis of impairments of both long-lived assets and goodwill for First Motors Corporation, a fictitious automobile company. By integrating multiple issues into this case, students are presented with some of the complexities and interrelationships that are seen in practice. To properly prepare solutions to this case, students must successfully read, interpret, and apply both accounting standards

The following report is presented in order to show that there is a specific stimulus for the selection of a particular accounting policy or method from a range of its alternatives. In the report, one of the most successful companies of Australia, i.e. Woolworths Limited (Woolworthslimited.com.au, 2015) is chosen and all the requirements of the report are fulfilled keeping this company in mind. The particular area with which the accounting policies relate is tangible fixed asset, and its valuation. For clarity and understanding point of view, the actual examples from the financial statements in the published annual reports of the company in the past

Over time however, users of financial statements began to question whether those principles and practices accurately reflected the market realities regarding the assets, their useful lives and their contribution to a company 's value. In addition, intangible assets have become increasingly more important as an economic resource.

While many companies have strived to differentiate their annual reports and make them informative, attractive and easy to read, most still take a rear-view-mirror approach, focusing almost exclusively on history and analyses of past performance. But in today’s world, as we have advanced into the Information Age, more companies will find that those assets most easily measured are not necessarily most valuable; increasingly they will be forced to measure intangible assets in a

Intangible assets such as patents, copyrights, licenses and secret formulas, franchise, trademarks, and others fall under the category of intangible assets identifiable, while the goodwill is an intangible identified the most common. Intangible assets can be classified as indefinite or specific, depending on the details. For example, a patent has a clear life or the time frame, while such schedules do not exist to the reputation of the company's brand name. (onlinelibrary.wiley, 2004) The consolidation statement for adidas shows the intangible assets as goodwill 1,169 and trademarks 1,432 and other intangible assets 162 ( page

Based on the balance sheets of 2012 to 2014 financial years of the two well-known Australian mining companies listed on the Australia Stock Exchange (ASX), which are BHP Billiton and Rio Tinto, it can be seen the relationship between relevance value (the capability of making a difference in user decisions) and reliability value (if the information is realistic, verifiable and neutral for capitalization of assets). BHP Billiton only reports two intangible assets which are goodwill and other intangibles, goodwill being the difference in consideration paid for a business combination where it exceeds the fair value of the of the identifiable net assets acquired, which is immediately recognized in the income statement as it is attributable to a non-controlling interest in a business combination and since it is determined on a transaction by transaction basis.