Answered: Which one of the following is not a…

Which one of the following is not a method of valuation of goodwill? a. Super profit method b. Average profit method c. Revaluation method d. Capitalization method

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 4MC: Which of the following statements about capitalizing costs is correct? A. Capitalizing costs refers...

See similar textbooks

Related questions

Q: The difference between book value of the asset with the proceeds receive from its sale, with result…

A: Assets: It refers to the economic value of all resources owned by the business at a given point in…

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: Required: 1. Determine the goodwill or gain on bargain purchase from the above acquisition.

A: When one company acquired 50% of the capital and assets of another company or more is known as…

Q: Value-in-use is O a. The discounted present value of future cash flows arising from use of the asset…

A: Value-in-use:-It is future cash inflows and outflows which arise from the continuous use of assets…

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: Th e initial measurement of goodwill is most likely aff ected by: B . the acquired company’s book…

A: Initially goodwill is measured as the difference between the purchase price paid for acquisition and…

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: If the value implied by the purchase price of an acquired company exceeds the fair values of…

A: Goodwill on acquisition = Purchase consideration paid - Fair value of net identifiable assets…

Q: 2. Goodwill and unrealized profit calculation Goodwill Fair value of consideration transferred Non…

A: Consolidation of Accounts: Consolidation of financial accounts refers to the act of merging or…

Q: what are some pros and cons of holding high level of current assets in relation to sale?

Q: Same data in I1, but assuming the use of asset revaluation method, how much is the total asset…

A: Revaluation of assets is done to find out their current or present value on the basis of the net…

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: What is the difference between tangible and intangible assets?

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: 1. Which statement about negative goodwill is true? Negative goodwill should be recorded as a…

A: Negative goodwill : The goodwill is negative when the fair value of assets exceeds the amount…

Q: Which of the following best describes the higher of an asset's net selling price and its value in…

A: Asset's net selling price is the amount obtainable from the sale of assets less any disposal cost.…

Q: Which of the following is measured at fair value with fair value changes recognized in profit or…

A: Explanation: Held to maturity investments: Investments that are held to maturity are classified at…

Q: Question 2 Which of the following statements regarding goodwill is incorrect? An internally created…

A: The goodwill is an intangible asset, which is created with purchase of one company by the other…

Q: The best evidence of fair value for an investment property is price in a binding sale agreement…

A: Fair value is the value of investment measured at market prices for assets and liabilities.

Q: Assets acquired ina lump-sum purchase are valued based on: a. Their assessed valuation. b. Their…

A: As per IAS 16, when more than one item of property, plant, and equipment is purchased for a…

Q: From a consolidated point of view, when should the profit be recognized on intercompany sales of…

A: In case of inter company transactions, any unrealized profit arises, such profit should not be…

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: 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: Under PAS 1, which of the followingitem is not included in the computation of profit? Finance…

A: PAS 1 : It is an accounting standard under Philippines Accounting Standards, the standard…

Q: As compared to capitalizing a cash expenditure, what is the initial effect on asset turnover of…

A: Asset Turnover Ratio: The total asset turnover ratio evaluates the efficiency of the organization…

Q: Determine the estimated value of Entity E assuming goodwill is computed through capitalization of…

A: Answered:

Q: Th e initial measurement of goodwill is most likely aff ected by: A . an acquisition’s purchase…

A: Goodwill is an intangible asset which appears under the assets section of the balance sheet. The…

Q: Access the glossary (“Master Glossary”) to answer the following. a. What does it mean to…

A: Answer: To capitalize an item means to use the item for the long term in the business and disclose…

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: If the value implied by the purchase price of an acquired company exceeds the fair values of…

A: Business combination between companies may result in profit or loss which are generally referred…

Q: In a business combination, goodwill is defined as the excess of acquisition cost over the a.…

A: Goodwill is a form of intangible asset for the business which we cannot see or touch but one can…

Q: a. Over what period of time should the cost of a patent acquired by purchase be amortized?b. In…

A: Intangible Assets: These are the long-term assets having no physical existence. However, the…

Q: The first step in determining goodwill impairment involves comparing the * implied value of a…

A: Goodwill is an intangible asset. Mostly, it is recognized by the company when one company purchases…

Q: if the value implied by the purchase price of an acquired company exceeds the fair values of the…

A: Acquisition refers to purchase of a company by another company by paying purchase consideration in…

Q: not a method of valuation of goodwil

A: Goodwill is the value of a business in the eyes of external parties. This shows the supremacy of the…

Q: n current purchasing power technique (a) Why is it necessary to consider monetary assets…

A: Purchasing Power- Purchasing Power defines the value of currency in relation to goods, It depicts…

Q: Under which type of investment classification is directly attributable cost of acquisition is not…

A: Financial assets are highly liquid intangible assets that can provide future monetary benefits to…

Q: The primary measurement basis is A.The current market price if the asset currently held was sold…

A: Measurement basis provides information in financial reports which meets the qualitative…

Q: Which of the following is not a capital expenditure decision Select one: a. Improvement in fixed…

A: SOLUTION- AN EXPENSE WHICH INVOLVES REPLACEMENT OF THE ENTIRE ASSET IS A CAPITAL EXPENDITURE . WHILE…

Q: During the measurement period, which of the following may affect the amount of goodwill from…

A: Measurement period is the period after the acquisition date in which acquirer can adjust the…

Q: Which of the following is/are true regarding goodwill achieved through acquisition as part of…

A: Goodwill is referred to as intangible non-current asset of the business. In the case, the goodwill…

Q: According to historical cost principle, the assets and liabilities should be reported (tick…

A: Assets and liabilities are the part of the balance sheet of a company. They help in determining the…

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…

Question

Which one of the following is not a method of valuation of goodwill? a. Super profit method b. Average profit method c. Revaluation method d. Capitalization method

Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

VIEW

Answer:

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Which of the following statements about capitalizing costs is correct? A. Capitalizing costs refers to the process of converting assets to expenses. B. Only the purchase price of the asset is capitalized. C. Capitalizing a cost means to record it as an asset. D. Capitalizing costs results in an immediate decrease in net income.
15. Which one of the following is not a method of valuation of goodwill? a. Average profit method b. Revaluation method c. Super profit method d. Capitalization method
Questions: a. How much is the Goodwill/Gain on Bargain Purchase? b. How much is the Consolidated Assets? c.
Which statement regarding goodwill is true? a. goodwill is an unidentifiable intangible assetb. internally developed goodwill should be capitalized while purchased goodwill should beexpensedc. goodwill can be defined as the value attached to the ability of a company to earn a higherthan normal rate of return on the book value of its identifiable assetsd. in some situations, FASB Statement No. 141 requires that negative goodwill be recorded
Which one of the following category goodwill lies? a. Fictitious asset b. Intangible asset c. Non-current asset d. Current asset
What is the difference between tangible and intangible assets? What is difference between fair value and market value? What is Goodwill? Why is it difficult to determine its true value?
Th e initial measurement of goodwill is most likely aff ected by: A . an acquisition’s purchase price
How is the goodwill impairment calculated? I thought it was by adding assets and subtracting the accounts payable for net assets. Then adding goodwill and subtracting the fair value
In a business combination, goodwill is defined as the excess of acquisition cost over the a. fair value of assets acquired. b. fair value of assets acquired less the liabilities assumed. c. net book value of assets acquired. d. book value of assets acquired less the liabilities assumed.
Which of the following statements regarding IFRS accounting for goodwill is/are incorrect: (i) Negative goodwill is reported as a liability (ii) A goodwill impairment expense decreases the carrying amount of goodwill on the consolidated SoFP (iii) The calculation of goodwill at acquisition date must include the fair value of non-controlling interests in the acquiree
Access the glossary (“Master Glossary”) to answer the following. a. What does it mean to “capitalize” an item? b. What is the definition of a nonmonetary asset? c. What is a nonreciprocal transfer? d. What is the definition of “contribution”?
The reason goodwill is sometimes referred to as a master valuation account is because a. it represents the purchase price of a business that is about to be sold.b. it is the difference between the fair market value of the net tangible and identifiableintangible assets as compared with the purchase price of the acquired business.c. the value of a business is computed without consideration of goodwill and thengoodwill is added to arrive at a master valuation.d. it is the only account in the financial statements that is based on value, all otheraccounts are recorded at an amount other than their value.