Case 04-3 : Home Computer, Inc. Kamontip Sakdivorapong ______________________________________________________________________________________________ Home computer, Inc. has 3 business segments: Computer manufacturing, printer manufacturing and retail store. (1) computer manufacturing: Home computer will discontinue its video monitor operations at Seattle plant and establish a replacement in Sacramento. Other component parts will continue to be manufactured at the Seattle facility. The company will scrap the equipment and “special interior building configuration assets” related to the video monitor operations. According from ASC 310-10-20 Glossary, Asset group refer as “An asset group is the unit of …show more content…
Asset Group | Carrying Amount (million) | Pro Rata | Allocation of impairment(Loss), million | Adjusted Carrying amount, million | Long lived asset : | | | | | Building | $15 | 65% | ($12.7) | $2.3 | Equipment | $ 8 | 35% | ($6.8) | $1.2 | Total | $23 | 100% | ($19.5) | $3.5 |
The present fair value of Building is $24 million, therefore the amount adjusted of the fair value would be $24-$2.3= $21.7 million.
Impairment Loss = Carrying amount of asset group- asset group Fair Value = $23- ($21.7) = $ 1.3 million
(2) printer Manufacturing Operations: Home Computer will discontinue its printer manufacturing operations at its Santa Clara facility and relocate to Sacramento, and the Santa Clara building is for sale. The disposal asset of printer manufacturing operations are building and equipment. Since Home Computer has signed a binding commitment with a third-party to sell the facility for $12 million subsequent to the move to the replacement facility, which would be in 10 months period. The building and equipment would be classified the asset “Held for Sale” because they met the criteria in ASC 360-10-45-9.
ASC 360-10-45-9 A long-lived asset (disposal group) to be sold shall be classified as held for sale in the period in which all of the
ASC 360-10 provides guidance on accounting for property, plant, and equipment, and the related accumulated depreciation on those assets. This Subtopic also includes guidance on the impairment or disposal of long-lived assets. ASC 360-10 notes that long-lived tangible assets include land and land improvements, buildings, machinery and equipment, and furniture and fixtures.
of it’s financial rope but has 500 excellent computers that it can sell for cheap in a 14 day period. On the
According to AASB 116 Property, plant and equipment held beyond the normal operating cycle of entity are deemed to be non-current assets. Here’s the extract from the report.
Most estimates place in-house retirement of assets at $300-$500 per computer. With 2270 computers currently in use by company employees (additional 49 in reserve), this equates to more than $900,000 to turn over all of our desktops and laptops. This does not include all of our servers and other storage units. The overall cost would be in excess of $1 million. While this amount falls well within our IT budget of $80 million, there may be another, more economical way in which to retire our outdated equipment.
or restructure the operation to which an asset belongs, plans to dispose of an asset before the
eventual disposition of the asset (asset group). That assessment shall be based on the carrying amount
Finally, our net book value in 2010 will be $122,050.10, which is the difference between the new 2010 leasehold improvement and the accumulated depreciation of leasehold improvements:
457). Getting a loan from the bank is not a sales since an intangible claim is passed from seller to buyer. Something is a good if the item is tangible and movable. Thus, selling the rights to a trademark is not a sale of goods because the trademark is not tangible. Likewise, the sale of a residence is also not a sale of goods because the home is not movable. The UCC will govern the dispute only if the "goods" criteria are satisfied.
A current expectation that, more likely than not, [footnote omitted] a long-lived asset (asset group) will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.
The state laws requiring LOI to remove the asbestos create an obligation to remove the asbestos under ASC 410-20-15-2a for the ten warehouses that LOI will sell within five years. ASC 410-20-25-8b indicates that an asset retirement obligation is estimable if all of the following exist:
* Expected that the asset will be sold or disposed of before the end of its estimated useful life
It should be noted that an income approach could have also been used. Using a determined market discount rate of 6% and current year revenue of $3,028,000 at a four year discounted rate, the value would have been $12,040,548. Because adequate market information was available to make a more accurate estimate of the fair value, this is the estimate that was chosen.
Are you tired of paying hundreds or thousands of dollars to a company for a computer that gives a below average experience? Well, why not build your own computer? This might sound like a crazy idea, but once you understand the principles, it's a piece of cake and you will probably end up saving 100 or 200 dollars from buying the same thing from a well-known company. You might be asking yourself, "How on earth am I supposed to build a computer? Where will I obtain the parts?". Well, don't worry, because this guide is everything you need from sourcing the parts to booting up your own functional computer. The basics are always the computer essentials: a motherboard, a CPU, a graphics card [optional], RAM, a hard drive, a power supply and a
When setting out to find a market for Kittyhawk, there were several correct and incorrect decisions that the DMD division made that greatly affected their product and its future effectiveness. They initially went about it the right way by researching the electronics industry and the several companies within the industry that might want their new product. They also spent time analyzing HP’s future product plans and how they aligned with that of Kittyhawk’s. They looked into businesses where their innovative and disruptive product may have a greater demand and be better able to quickly incorporate
This report will identify the positioning of Apple’s notebook product line ‘MacBook’ to its relative competition by the use of marketing concepts such as; segmentation marketing, target marketing, buyer behaviour, product strategy and how the company has enhanced the product over the years.