The first step in determining goodwill impairment involves comparing the * implied value of a reporting unit to O its carrying amount (goodwill excluded). fair value of a reporting unit to its carrying amount (goodwill excluded). Assets fair value of a reporting unit O to its carrying amount (goodwill included). fair value of a reporting unit to its carrying amount (goodwill included). None of the options is correct
Q: 11. In recording exchanges of assets, which statement is not true? a. When boot is received for a…
A: Exchange of Similar assets Accounting for non-monetary transactions should be determined based on…
Q: how do you determine when goodwill will be written off under the impairment rules
A: Goodwill:Goodwill is the good reputation developed by a company over years. This is recorded as an…
Q: The measurement of revaluation model is at: Fair value at the date of acquisition less any…
A: As per the INTERNATIONAL ACCOUNTING STANDARD Revaluation concept the measurement of Revaluation…
Q: An asset is impaired if: O a. The amount to be recovered through use (or sale) of the asset exceeds…
A:
Q: Explain the alternative methods that have been suggested to account for goodwill or excess on…
A: Intangible Assets are the non current fixed assets which can not be seen or touch. But they provide…
Q: Under U.S. GAAP, the impairment tests for goodwill and PP&E are different. Describe the main…
A: Property, plant and equipment: Property, plant and equipment are the tangible assets which are…
Q: Why are the impairment rules for goodwill different than for other assets? Explain
A: Goodwill: Goodwill is the good reputation developed by a company over years. This is recorded as an…
Q: Which of the following statements is true about goodwill? The intangible asset goodwill may be…
A: Goodwill is an intangible asset which appears in the asset side of entities balance sheet.
Q: Briefly explain the differences between U.S. GAAP and IFRS in the measurement of an impairment loss…
A: Under International Financial Reporting Standards (IFRS), the impairment loss is recognized, when an…
Q: If the value implied by the purchase price of an acquired company exceeds the fair values of…
A: A Goodwill in bookkeeping is an immaterial resource that emerges when a purchaser gains a current…
Q: The sale of a depreciable asset resulting in a loss indicates that the proceeds from the sale are…
A: The asset is regarded as the investment of money by the investor in something which makes a profit…
Q: Which among the sentences below is incorrect? An entity shall measure a current asset or disposal…
A: The correct answer for the above mentioned question is given in the following steps for your…
Q: If an entity was not able to determine the fair value of both the asset received and the asset given…
A: Where the exchange of Assets have a commercial substance (sufficient cash flow can be generated in…
Q: Which one of the following is not a method of valuation of goodwill? a. Super profit method b.…
A: Goodwill can be calculated by various methods suitable for various businesses considering various…
Q: The sale of a depreciable asset resulting in a loss indicates that the proceeds from the sale were…
A: Book value of assets = Cost of the assets - Accumulated depreciation Gain from sale of assets occurs…
Q: Provide detailed rational of why goodwill must be adjusted for impairment
A: Goodwill impairment is a charge that companies record when goodwill's carrying value on financial…
Q: If an asset is written down because of an impairment, in USA GAAP, it cannot be written back up…
A: PROVISIONS FOR REVERSAL OF IMPAIRMENT LOSS UNDER THE FOLLOWING STANDARD :- USA GAAP IFRS…
Q: For an SME, an impairment loss recognized for goodwill a. shall not be reversed in a subsequent…
A: Impairment loss: Impairment loss is defined as the loss recognized when the carrying value of the…
Q: In accordance with IAS 36 Impairment of Assets, which of the following statements are true?…
A: Assets are described as those resources which are owned or acquired by the business in order to use…
Q: Choose the correct. When should a consolidated entity recognize a goodwill impairment loss?a. If…
A: Goodwill is determined as an excess of the cost of a company acquired over the fair market value of…
Q: a. Determine the amount of any goodwill impairment for Alomar's Sellers reporting unit. b. After…
A: Goodwill Impairment loss = Implied value of goodwill - Carrying Value of Goodwill Once Goodwill…
Q: The gain on impairment loss reversal of an asset which is recognized in profit or loss is computed…
A: The loss of impairment is recognized in the income account and the reversal of the impairment loss…
Q: According to PFRS 5, gain in impairment reversal on an asset held for sale is a. recognized for the…
A: Solution: According to PFRS 5, gain in impairment reversal on an asset held for sale is "recognized…
Q: During the measurement period, which of the following may affect the amount of goodwill from…
A: Measurement period refers to the reasonable time period after the date of acquisition when acquirer…
Q: 1. The sale of a depreciable asset resulting in a loss indicates that the proceeds from the sale are…
A: An asset is depreciated over a period of life based on estimates. Carrying amount, also known as…
Q: implied value of a reporting unit to its carrying amount (goodwill excluded). fair value of a…
A: Steps for determining the goodwill impairement includes If unit fair value is less than carrying…
Q: Impairment loss is a situation when Select one: a. Carrying amount of an asset is greater than…
A: The greater of the following two values are the recoverable amount of an asset: Fair value minus…
Q: In relation to goodwill arising from a business combination, which of the following statements is in…
A: As per IFRS 3 Goodwill is only tested for impairment if it’s fair value drops below the value…
Q: Describe the procedures for conducting a goodwill impairment test.
A: Goodwill: Goodwill is an intangible asset. It is defined as the excess of cost of an acquired…
Q: Which one of the following category goodwill lies? a. Intangible asset b. Fictitious asset c.…
A: Assets example Intangible assets Trade mark, copy right, goodwill etc Fictitious assets Prepaid…
Q: A loss on disposal
A: The loss on disposal arose when the asset is sold for less than the book value of the asset. The…
Q: Which statement regarding goodwill is true?
A: Goodwill: Goodwill is the asset to the company which is shown in the asset side of the balance under…
Q: How do SMEs account for impairment losses on CGUs? a. The impairment loss is charged first to…
A: The carrying amount of the asset is the amount of asset that is reported on the balance sheet after…
Q: Which one of the following category goodwill lies? a. Fictitious asset b. Intangible asset c.…
A: Option a. Fictitious asset cannot be converted into cash but goodwill can be encashed. Option b.…
Q: 6.) In reference to the determination of goodwill impairment, which of the following statements is…
A: Goodwill impairment occurs when the recognized goodwill associated with an acquisition is greater…
Q: Which of the following is NOT a step in impairment testing? Select one: a. Calculate the asset’s…
A: An asset is said to be impaired if the carrying value of such asset is higher than the higher of…
Q: Which of the following statements about MACRS is false? A. Depreciable assets are assumed to have no…
A: MACRS stands for "Modified Accelerated Cost Recovery System" MACRS is the depreciation method…
Q: According to PFRS 9, impairment gain
A: As per PFRS9 impairment losses and impairment gains (in the case of purchased or originated…
Q: Explain the accounting treatment in the event that an impairment review of a non-current asset which…
A: Impairment loss: It is a decrease in carrying amount of the asset since the fair value is declined.…
Q: According to PFRS 9, which of the following represents a cessation of a financial asset’s impairment…
A: According to the above question option 1 is the correct answer.
Q: A transfer from investment property carried at fair value to owner-occupied property shall be…
A: Investments: Investment is defined as an allocation of money with the prospect of some future…
Q: Explain the process for determining the impairment of goodwill. Include the requirements of IAS 36…
A: The underlying premise of IAS 36 is that an asset should not be carried in the financial statements…
Q: One factor that is not considered in determining the useful life of an intangible asset is* Residual…
A: Hi Student Since there are multiple questions we will answer only first question. If you want…
Q: Just briefly describe how impairment losses for goodwill are calculated under U.S. GAAP and IFRS,…
A: The answer
Q: When the auditor wants to test the asset for impairment, the auditor would most likely be concerned…
A: Impairment of assets means reducing the book value of assets when carrying amount is more than…
Q: During the measurement period, which of the following may affect the amount of goodwill from…
A: IFRS 3 throws light on business combinations and how contingent consideration is treated in the…
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- On January 1, 2013, Porsche Company acquired the net assets of Saab Company for $450,500 cash. The fair value of Saab’s identifiable net assets was $374,980 on this date. Porsche Company decided to measure goodwill impairment using the present value of future cash flows to estimate the fair value of the reporting unit (Saab). The information for these subsequent years is as follows: Year Present Valueof Future Cash Flows Carrying Value ofSaab’s IdentifiableNet Assets* Fair ValueSaab’s IdentifiableNet Assets 2014 $400,620 $329,851 $339,983 2015 $399,230 $319,497 $345,596 2016 $350,150 $299,900 $325,360 * Identifiable net assets do not include goodwill. (a) For each year determine the amount of goodwill impairment, if any. 2014 2015 2016 Goodwill impairment $ $ $Live Corporation has equipment with a carrying value of 450,000 on December 31, 2021. The following information was available on December 31, 2021: · Expected net cash flows (undiscounted)- P420,000 · Expected net cash flows discounted at 7%- P400,000 · Fair value, using the assets with other assets- P415,000 · Fair value, assuming the assets are sold stand-alone- P428,000 What is the impairment loss that the Company must report in its 2021 income statement for this equipment?Harlem, Inc., was reviewing its assets for impairment at the end of the current year.Information about one of its assets is as follows:Net book value.........................Estimated future cash flows......Fair (market) value...................$ 1,300,000$ 1,050,000$ 1,025,000Harlem should report an impairment loss for the current year ofa. $275,000.b. $25,000.c. $0.d. $250,000.
- Crane Company owns a trade name that was purchased in an acquisition of Wildhorse Co.. The trade name has a book value of $2200000, but according to IFRS, it is assessed for impairment on an annual basis. To perform this impairment test, Crane must estimate the fair value of the trade name. It has developed the following cash flow estimates related to the trade name based on internal information. Each cash flow estimate reflects Crane's estimate of annual cash flows over the next 7 years. The trade name is assumed to have no residual value after the 7 years. (Assume the cash flows occur at the end of each year.) Probability Assessment Cash Flow Estimate 30% $250000 50% 360000 20% 450000 Crane determines that the appropriate discount rate for this estimation is 7%. To the nearest dollar, what is the estimated fair value of the trade name?On January 1, 2021, Bambi Ltd. purchased equipment for $728,000. The equipment was assumed to have an 8-year useful life and no residual value and was to be depreciated using the straight-line method. On January 1, 2023, Bambi's management became concernedthat the equipment may have become obsolete. Management calculated that the undiscounted future net cash flows from the equipment was $523,250, the discounted future net cash flows was $464,100, and the current fair value of the equipment less cost ofdisposal (of $1,800 ) was $455,000. (a)Assuming that Bambi is a private Canadian company following ASPE, identify which model should be used to test for impairment. b) Record the journal entry to record the impairment loss, if any. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and…On January 1, 2021, Bambi Ltd. purchased equipment for $728,000. The equipment was assumed to have an 8-year useful life and no residual value and was to be depreciated using the straight-line method. On January 1, 2023, Bambi's management became concernedthat the equipment may have become obsolete. Management calculated that the undiscounted future net cash flows from the equipment was $523,250, the discounted future net cash flows was $464,100, and the current fair value of the equipment less cost ofdisposal (of $1,800 ) was $455,000. c) Assuming that Bambi is a public Canadian company, identify which model should be used to test for impairment. d) Record the journal entry to record the impairment loss, if any. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit…
- On January 1, 2021, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $200,000 in cash. The equipment had originally cost $180,000 but had a book value of only $110,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman's equipment of book value $200,000 and Brannigan's equipment of book value $150,000. Ackerman reported $300,000 in net income in 2021 (not including any investment income) while Brannigan reported $98,000. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $4,000 per year. A) What is consolidated equipment balance?on january 1 2018 bridgeport ltd purchased equipment for 896000 . the equipment was assumed to have an 8 year useful life and no residual value and was to be depreciated using the straught line method . on january 1 2020 , bridgeport 's management became concerned that the equipment may have become obsolete. management calculated that the undescontinued future net cash flows from the equipment was $644000 , the discounted future net cash flow was $571200 and the current fair value of the equipment was$ 560000 and the cost to sell was zero .a. Record the journal entry to record the imparment loss if any using the cost recovery impairment model . assume that bridgeport is applying ASPE to determine wether there is impairment or not. you must show all the steps in the impairment test.b. Record the journal entry to record the imparment loss if any using the rational entity impairment model . assume that bridgeport is applying IFRS to determine wether there is impairment or not. you must…On January 1, 2021, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $110,000 in cash. The equipment had originally cost $99,000 but had a book value of only $60,500 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method. Ackerman reported $550,000 in net income in 2021 (not including any investment income) while Brannigan reported $180,500. Ackerman attributed any excess acquisition-date fair value to Brannigan's unpatented technology, which was amortized at a rate of $6,500 per year. What is consolidated net income for 2021? What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan? What is the parent's share of consolidated net income for 2021 if Ackerman owns only 90 percent of Brannigan and the equipment transfer was upstream? What is the consolidated net income for 2022 if Ackerman reports $570,000 (does not include…
- On January 1, 20x1, DIAPHANOUS Co. acquired all of the identifiable assets and assumed all of the liabilities of TRANSPARENT, Inc. by paying cash of ₱4,000,000. On this date, the identifiable assets acquired and liabilities assumed have fair values of ₱6,400,000 and ₱3,600,000, respectively.During 2019, ABC Co. sold for P21,000 some of its plant assets costing P150,000 and having accumulated depreciation of P119,000 at date of sale. The sale of the plant assets should be shown on ABC Co.’s statement of cash flows (indirect method) for the year ended December 31, 2019, as *a. a deduction from net income of P10,000 and a P21,000 increase in cash flows from financing activities b. an addition to net income of P10,000 and P21,000 increase in cash flows from investing activities c. a deduction from net income of P11,000 and P21,000 increase in cash flows from investing activities d. an addition of P21,000 to net income e. answer not givenOn January 1, 2018, Ackerman sold equipment to Brannigan (a wholly owned subsidiary) for $200,000 in cash. The equipment had originally cost $180,000 but had a book value of only $110,000 when transferred. On that date, the equipment had a five-year remaining life. Depreciation expense is computed using the straight-line method.Ackerman reported $300,000 in net income in 2018 (not including any investment income) while Brannigan reported $98,000. Ackerman attributed any excess acquisition-date fair value to Brannigan’s unpatented technology, which was amortized at a rate of $4,000 per year.a. What is consolidated net income for 2018?b. What is the parent’s share of consolidated net income for 2018 if Ackerman owns only 90 percent of Brannigan?c. What is the parent’s share of consolidated net income for 2018 if Ackerman owns only 90 percent of Brannigan and the equipment transfer was upstream?d. What is the consolidated net income for 2019 if Ackerman reports $320,000 (does not include…