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Acquired Company (in thousands) Lancope, Inc Technology Useful life (in years) Amount $79,000 240,000 in Limited Lives 5 Jasper Technologies, Inc 6 Customer Relationships Useful life (in years) 6 7 Amount $29,000 75,000 Indefinite Lives IPR&D Amount $121,000 23,000

Acquired Company (in thousands) Lancope, Inc Technology Useful life (in years) Amount $79,000 240,000 in Limited Lives 5 Jasper Technologies, Inc 6 Customer Relationships Useful life (in years) 6 7 Amount $29,000 75,000 Indefinite Lives IPR&D Amount $121,000 23,000

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 62E
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Amortization and Impairment Testing of Identifiable Intangible Assets During the year ended July 30, 2016, Cisco Systems, Inc. acquired the following identifiable intangible assets through its purchase of two companies (in thousands): Limited Lives Indefinite Lives IPR&D Acquired Company (in thousands) Lancope, Inc Jasper Technologies, Inc Technology Useful life (in years) Amount 5 $79,000 6 240,000 Acquired Company (in thousands) Lancope, Inc Jasper Technologies, Inc Technology Sum of Sum of expected expected undiscounted discounted Cisco acquired Lancope, Inc. in December 2015, and Jasper Technologies, Inc. in March 2016. Cisco separately tests identifiable intangibles acquired from each company for impairment, and collects the following information to conduct impairment tests at the end of fiscal 2016 (in thousands): IPR&D Customer Relationships Sum of Sum of Sum of expected expected expected undiscounted discounted undiscounted cash flows cash flows $25,000 $20,000 80,000 65,000 cash flows $130,000 30,000 cash flows cash flows $70,000 $65,000 200,000 150,000 Customer Relationships Useful life (in years) 6 7 • Round answers to the nearest whole number. • Enter answers in thousands. Acquired Company Technology Lancope, Inc. Jasper Technologies, Inc. Required a. Calculate amortization expense for the above identifiable intangibles for fiscal 2016. Intangibles are amortized on a straight-line basis starting in the month following acquisition. $ Acquired Company Lancope, Inc. Jasper Technologies, Inc. S Customer Relationships 9,217 ✔ S 13,333 b. Calculate impairment losses for fiscal 2016. • Round answers to the nearest whole number. • Enter answers in thousands. 76,667 Amount $29,000 75,000 2,819✔ 3,571 Customer Technology Relationships 05 6,181 ✔ S 0✓ Amount $121,000 23,000 Sum of expected discounted cash flows $105,000 26,000 IPR&D 16,000 ✓ 0✔
Transcribed Image Text:Amortization and Impairment Testing of Identifiable Intangible Assets During the year ended July 30, 2016, Cisco Systems, Inc. acquired the following identifiable intangible assets through its purchase of two companies (in thousands): Limited Lives Indefinite Lives IPR&D Acquired Company (in thousands) Lancope, Inc Jasper Technologies, Inc Technology Useful life (in years) Amount 5 $79,000 6 240,000 Acquired Company (in thousands) Lancope, Inc Jasper Technologies, Inc Technology Sum of Sum of expected expected undiscounted discounted Cisco acquired Lancope, Inc. in December 2015, and Jasper Technologies, Inc. in March 2016. Cisco separately tests identifiable intangibles acquired from each company for impairment, and collects the following information to conduct impairment tests at the end of fiscal 2016 (in thousands): IPR&D Customer Relationships Sum of Sum of Sum of expected expected expected undiscounted discounted undiscounted cash flows cash flows $25,000 $20,000 80,000 65,000 cash flows $130,000 30,000 cash flows cash flows $70,000 $65,000 200,000 150,000 Customer Relationships Useful life (in years) 6 7 • Round answers to the nearest whole number. • Enter answers in thousands. Acquired Company Technology Lancope, Inc. Jasper Technologies, Inc. Required a. Calculate amortization expense for the above identifiable intangibles for fiscal 2016. Intangibles are amortized on a straight-line basis starting in the month following acquisition. $ Acquired Company Lancope, Inc. Jasper Technologies, Inc. S Customer Relationships 9,217 ✔ S 13,333 b. Calculate impairment losses for fiscal 2016. • Round answers to the nearest whole number. • Enter answers in thousands. 76,667 Amount $29,000 75,000 2,819✔ 3,571 Customer Technology Relationships 05 6,181 ✔ S 0✓ Amount $121,000 23,000 Sum of expected discounted cash flows $105,000 26,000 IPR&D 16,000 ✓ 0✔
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