The Measurement Of Identifiable Assets

c. The amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed.

With reference to the Conceptual Framework, when preparing the financial statement, using the measurement bases include historical cost, current cost, present value and fair value is called a mixed measurement approach (Rankin, M., Stanton, P., McGowan, S., Ferlauto, K & Tilling, M., 2012).

ASC 820 requires that the measurement of fair value of assets acquired and liabilities assumed should be based on the

i. How did Cisco determine the allocation of the purchase price to specific tangible and intangible assets? (see business combinations in the summary of significant accounting policies in note 2.)

The accounting equation: Assets = Liabilities + Owner’s Equity. Assets are the resources of the company. Examples include cash, land, buildings, and equipment. Liabilities are “outsider claims”, the company’s obligations to creditors. Examples include accounts payable, notes payable, and income taxes payable. Owner’s Equity represents “insider claims” of the company or the owner’s share of the assets. If a business is keeping accurate records this equation should always be in balance.

The assets and liabilities being obtained were recorded by the buyer at fair value as of the date of acquisition

As the business environment grows and companies find new ways to expand into their respective - or even new – markets, it is important that reporting standards stay up to date with changes and continue to assist companies in providing their users with useful accounting information. Information is labelled as being useful when it meets the

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.)

The use of Asset offers the guesstimate of reoffending, distinguish areas that require serious intervention and determine the alteration that needs to be made in order to reduce the risk and vulnerability (Sutton and Davies, 1997). When evaluating Alicia’s actions, the risk factors will be judged by a specialists who has interactive skills, the capability to shift advice and related hypothetical understanding to everyday decisions (Baker et al., 2004). This ranges from her living arrangements to her ambition to change. The assessment is required to be complied in a way that involves Alicia and the people around her. Additionally, to be able to simplify the results by these specialists, a contrast will be made to the self-assessed document that is identical to the main report, which offers young people the opportunity to manifest their opinion (Baker et al., 2005).

The fair value of an asset is defined as ‘the price that would be received to sell an asset paid to transfer a liability in an orderly transaction between market participants at the measurement date” (Kieso, Weygandt, & Warfield, 2012). It is a market based measure (Averkamp, 2014). Over the past few years, Generally Accepted Accounting Principles has called for the use of fair value measurement in a company’s financial statements. This is what is referred to as the fair value principle (Kieso, Weygandt, & Warfield, 2012). The fair value of an asset or liability is based on an estimate of what the asset should be worth at the time of sale. This gives rise to some conflict among accounting professionals. It is believed that fair value may not be as accurate

* To recognise separately, at the acquisition date, the acquiree’s identifiable assets, liabilities and contingent liabilities.

The intangible asset needs to be identifiable which means that the organization should be able to dispose of the asset without disposing off the whole of the business at the same time.

AASB 138 defines intangible assets as “identifiable non-monetary assets without physical substance”. Such assets include but are not limited to goodwill, trademarks, patents and research and development. AASB 138 Intangible Assets has been implemented to prescribe the accounting treatment for intangible assets that have not been specifically dealt with in any other standard. Therefore, this standard only applies to intangible assets that have not been previously dealt with. Furthermore, it can be established that this standard is an example of normative accounting theories because the standard prescribes what should be done, rather than predicts what people may do. According to AASB 138 Intangible Assets, in order for an asset to be recognised in the financial statements it must meet specific criteria. The required criterion states that the asset must be identifiable, the entity has control of the asset, future economic benefits are probable and the cost of the asset can be measured reliably.

According to this concept the asset is recorded in the books of accounts at the price paid for it and not at its market value. For example: if a business entity purchases a building valued at $15 million from a friend for $12 million, this asset would be recorded at $12 million and not at $ 15 million, because for the business entity the cost was $12 million and not $15 million.

1.0 INTRODUCTION Asset management is a concept that companies use to ascertain the value of their assets. It provides a quick measure of the worthiness of the organization and so becomes easier for organizations to prepare their final accounts as they are able to quickly estimate the value of their assets. Well managed organizations are required to perform regular fixed asset audits. Tracking and managing corporate assets and equipment is a challenge to most organizations especially when there is a large volume of assets or when those assets move frequently between departments or multiple branches. However in today‟s regulatory environment, it has become more important than ever for companies to